By Jueseppi B.
WASHINGTON, D.C. 20503
July 31, 2012
MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES
FROM: Jeffrey D. Zients
SUBJECT: Issues Raised by Potential Sequestration Pursuant To Section 251A of the
Balanced Budget and Emergency Deficit Control Act of 1985
Passed by bipartisan majorities in both houses ofthe Congress, the Budget Control Act of
2011 (BCA; Public Law 112-25) amended the Balanced Budget and Emergency Deficit Control
Act of 1985 (BBEDCA) to put into place an automatic process of across-the-board reductions in
budgetary resources, known as a sequestration, specified in an order to be issued on January 2,
2013, ifthe Joint Select Committee on Deficit Reduction failed to propose, and the Congress
failed to enact, a bill containing at least $1.2 trillion in deficit reduction.
The President has made clear that the Congress should act to avoid such a sequestration.
If allowed to occur, the sequestration would be highly destructive to national security and
domestic priorities, as well as to core government functions. To avoid this, the President
submitted a budget for 2013 that includes a comprehensive and balanced set of proposals that
contain greater deficit reduction than the Congress was charged with achieving. The
Administration believes the Congress should redouble its efforts to reduce the deficit in a
bipartisan, balanced, and fiscally responsible manner and avoid the sequestration.
If Congress were to enact the requisite deficit reduction measures and avoid the
sequestration, there would be no need to take steps to issue the sequestration order, and then to
develop plans for agency operations for the remainder of FY 2013 within the constraints of that
order. These sequestration planning and implementation activities, once undertaken, will
necessarily divert scarce resources from other important agency activities and priorities. The
President remains confident that Congress will act, but because it has not yet made progress
towards enacting sufficient deficit reduction, the Office of Management and Budget (OMB) will
work with agencies, as necessary, on issues raised by a sequestration ofthis magnitude.
To that end, OMB will be holding discussions on these issues with you and your staff
over the coming months. In the near term, OMB will consult with you on such topics as the
application to your agency’s accounts and programs of the exemptions from sequestration
contained in section 255 ofBBEDCA and the applicable sequestration rules specified in section
256 ofBBEDCA. These discussions should be informed by your General Counsel‘s analysis of
how the requirements of BBEDCA, as amended by the BCA, and other statutory authorities apply to a particular issue involving your agency. OMB will also engage with agencies on anticipated reporting requirements established by Congress that are related to, but separate from, planning for or implementing a sequestration order under the BCA.
Over the longer term, in the absence of Congressional action on a balanced deficit
reduction plan in advance of January 2, 2013, OMB will undertake additional activities related to
the implementation ofthe BCA. OMB will work with agencies, as necessary, on issues
surrounding the sequestration order and its implementation. For example, sequestrable amounts
can only be calculated once FY 2013 funding levels are known; therefore, shortly before any
sequestration order is issued, OMB will collect information from agencies on sequestrable
amounts and, where applicable, unobligated balances, and calculate the percentage reductions
necessary to implement the sequestration. In the meantime, agencies should continue normal
spending and operations since more than 5 months remain for Congress to act.
The steps described above are necessary to prepare for the contingency of having to issue
a sequestration order, but they do not change the fact that sequestration is bad policy, was never
meant to be implemented, and should be avoided through the enactment ofbipartisan, balanced
deficit legislation. The Administration urges the Congress to take this course.
THE WHITE HOUSE, March 1, 2013.
By the authority vested in me as President by the laws of the United States of America, and in accordance with section 251A of the Balanced Budget and Emergency Deficit Control Act, as amended (the “Act”), 2 U.S.C. 901a, I hereby order that budgetary resources in each non-exempt budget account be reduced by the amount calculated by the Office of Management and Budget in its report to the Congress of March 1, 2013.
Pursuant to sections 250(c)(6), 251A, and 255(e) of the Act, budgetary resources subject to sequestration shall be new budget authority, unobligated balances of defense function accounts carried over from prior fiscal years, direct spending authority, and obligation limitations.
All sequestrations shall be made in strict accordance with the requirements of section 251A of the Act and the specifications of the Office of Management and Budget’s report of March 1,
THE WHITE HOUSE,
March 1, 2013.
Thank you CNN.
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