NASA among Agencies Facing Spending Cuts from Sequestration

September 16th, 2012


On Oct. 1, theU. S.government will enter the 2013 fiscal year without a budget — not so unusual in recent years as lawmakers attempt to deal with mounting deficits and pressures to increase spending.

A likely Continuing Resolution, legislation that cleared the U. S. House on Thursday, promises to hold spending across the government at 2012 levels for six months beyond Oct. 1 — allowing the November presidential and congressional elections to come and go — if necessary, to ensure some stability.

But on Jan. 2, the CR could give away to a new law, the Budget Control Act of 2011, passed with bi-partisan support by the House and Senate to impose a mandatory $1.2 trillion reduction in the national deficit through 2021. Coming in the midst of a long running recovery from a national recession and high unemployment, sequestration will throw the U. S. back into an economic slump and lead to a rise in unemployment, some experts warn.

Some characterize sequestration in combination with expiring federal cuts as worrisome “fiscal cliff,” a term coined earlier this year by the U. S. Federal Reserve chairman Ben Bernanke.

On Friday, the White House Office of Management and Budget released a near 400 page report on the impact of the budget control legislation, if it is not changed prior to Jan. 2. In all, 1,200 federal accounts were studied.

NASA’s budget, cut from $18.44 billion in 2011 to $17.7 billion in 2012 would face an 8.2 percent reduction across most of its accounts — space operations, exploration, science, aeronautics and space technology included.

“As the Administration has made clear, no amount of planning can mitigate the effect of these cuts. Sequestration is a blunt and indiscriminate instrument,” the OMB said in the opening pages of the report. “It is not the responsible way for our nation to achieve deficit reduction. It is time for Congress to act. Members of Congress should work together to produce a balanced plan that achieves at least the level of deficit reduction agreed to in the Budget Control Act that  the President can sign to avoid sequestration.”

The Congressional Budget Office has studied the issue this year as well, concluding that sequestration threatens to throw theU. S.economy back into recession.

“Policymakers face difficult trade-offs in deciding how quickly to implement policies to reduce budget deficits,” the CBO noted. “In addition, and particularly important given the current state of the economy, immediate spending cuts or tax increases would represent an added drag on the weak economic expansion.”

The Aerospace Industries Association, which represents the nation’s major aerospace contractors, has been especially vocal in its warning as the specter of sequestration approaches.  The toll will include an estimated 2.1 million job losses, according to the AIA, which warns that in addition to weakening a fragile economy sequestration will jeopardize the U. S. military.

“The OMB Report Pursuant to the Sequestration Transparency Act of 2012 is the final nail in the coffin for pollyannas still pretending that sequestration wouldn’t be that bad,” Marion Blakey, the AIA’s CEO and president, said in response to the OMB’s report. “Indeed, it confirms what virtually every expert to study the problem has found — that such abrupt, indiscriminate cuts would be an economic and policy disaster for the United States of America.”

Job losses are predicted for virtually every U. S.sector: manufacturing, construction, retail, education and health, state and local government as well as the federal workforce, according to the AIA’s research.