H.R. 5872: Sequestration Transparency Act of 2012

H.R. 5872

Sequestration Transparency Act of 2012

Date
July 18, 2012 (112th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

On Wednesday, July 18, 2012, the House is scheduled to consider H.R. 5872, the Sequestration Transparency Act of 2012, under a suspension of the rules requiring a two-thirds majority vote for approval. H.R. 5872 was introduced by Rep. Jeb Hensarling (R-TX) on May 31, 2012, and was referred to the Committee on the Budget, which held a mark-up and reported the bill, as amended, on May 31, 2012.

Bill Summary

H.R. 5872 would require the President to submit to Congress a detailed preview of the sequestration required by the Budget Control Act and how the required spending cuts are to be implemented. Specifically, this bill would require the president to submit a report to Congress within 30 days of enactment that includes an estimate of the sequestration percentages and amounts necessary to achieve the required reduction for each spending category. Those percentages would have to be calculated relative to any enacted regular appropriation bills for fiscal year 2013. The bill would require the report to identify each account to be sequestered and provide estimates of the level of budgetary resources subject to sequestration and resulting reductions at the program, project, and activity level. For direct spending subject to sequestration, the bill would require the report to include an estimate for the defense and nondefense functions and an identification of the reductions required for each direct spending account at the program, project, and activity level.

Additionally, the bill would require the report to identify all exempt discretionary accounts and include any other data or explanations that would enhance public understanding of the looming sequester and actions to be taken under it. The bill would also require the head of each agency to provide the necessary information to the Director of the Office of Management and Budget.

Background

Under the Budget Control Act (S. 365), the spending authority of many federal departments and agencies will be automatically reduced on January 2, 2013, in order to comply with spending reductions required under the bill between fiscal years 2013 through 2021. The triggered reduction in spending is $1.2 trillion. After accounting for 18 percent in debt service savings, the required reductions amount to roughly $984 billion to be distributed evenly over 9 years, or $109.3 billion per year. These spending cuts would be applied with half of the cuts coming from defense spending and the other half coming from and non-defense categories. Numerous officials have noted that the automatic cuts to defense and other spending would be arbitrary and devastating. While House Republicans have passed legislation to replace these cuts with common-sense reforms, the Democrat Senate and the White House has shown no interest in working with Republicans to replace these pending cuts. If these cuts are going to occur, the American people deserve to know how they are going to be carried out. Despite repeated requests by Congress, the Obama Administration has yet to disclose in detail their plan for implementing the required spending reductions for fiscal year 2013.

Under current law, the across-the-board cuts imposed on January 2, 2013, would result in a 10 percent reduction in Department of Defense programs and an 8 percent reduction in certain domestic programs, such as the National Institutes of Health (NIH) and education programs. Intended as a mechanism to force action, the imposition of the sequester would arbitrarily cut funding to key defense programs. There is bipartisan agreement that deficit reduction should be achieved through other means–yet only House Republicans are advancing responsible solutions to achieve these shared goals.The House approved the Sequester Replacement Reconciliation Act (SRRA) of 2012 on May 15, 2012 (H.R. 5652), which fully replaced the sequester’s arbitrary cuts with targeted reforms of certain mandatory spending programs. However, the President has threatened to veto the bill, Senate Majority Leader Reid has embraced implementing the sequester. With cuts looming, the President has failed to put forward a detailed plan to avoid the sequester. Given the opposition of key political figures to the only legislative plan that has been offered to avoid the sequester, it would be irresponsible not to fully understand the implications if agreement to amend the law is not reached. The Budget Committee has worked to assess the impact of the sequester and to review proposals to replace the sequester, holding a hearing on April 25, 2012. On April 26, 2012, the Chairman Ryan wrote the Acting Director of OMB requesting additional information on the sequester. OMB did not provide all the information requested. As a result, the Congress and the American people are confronted with a sequester that will make deep reductions in programs on January 2, 2013, without the information on how this sequester will affect individual programs. According to Administration Officials, the impact of the sequester would be severe.

According to an analysis by Defense Secretary Leon Panetta, full implementation of the defense sequester would have a dramatic negative impact on our nation’s ability to defend itself. Specifically, Secretary Panetta wrote, “If the maximum sequestration is triggered, the total cut will rise to about $1 trillion compared with the FY 2012 plan. The impacts of these cuts would be devastating for the Department… Facing such large reductions, we would have to reduce the size of the military sharply.  Rough estimates suggest after ten years of these cuts, we would have the smallest ground force since 1940, the smallest number of ships since 1915, and the smallest Air Force in its history.”

Despite the gravity of the situation, the Administration has refused to provide basic details about the scope, severity, and extent of the arbitrary, across-the-board cuts required by the sequester. As CBO has stated, “the Administration's Office of Management and Budget (OMB) has sole authority to determine whether a sequestration is required and, if so, the proportional allocations of any necessary cuts.”  Thus, only the President knows what kind of impact the sequestration would have on individual agencies.  Since President Obama has failed to offer a legitimate solution to replace the scheduled sequester, he should be required to make his plans to implement sequestration public so that federal agencies and our fighting men and women have ample time to prepare for cuts because of his failure to act.  The American people deserve an open and transparent process when it comes down to how their hard earned money is spent. The Sequester Transparency Act ensures the public will fully understand the impact of the sequester, before it is too late.

For more information on the impact of the sequester on the Department of Defense, see the House Armed Services Committee materials here: http://armedservices.house.gov/index.cfm/defense-cuts-resources

For more information on House Republican efforts to replace the arbitrary sequester with common-sense reforms, see Budget Committee materials here: http://budget.house.gov/reconciliation/

Cost

According to CBO, “implementing the legislation would have no significant impact on the federal budget because it would not significantly increase OMB's workload under current law.”