Agencies, Contractors Chafe at Cliff Deal’s Uncertainty on Sequestration

January 2, 2013

The freshly passed legislation designed to avoid the fiscal cliff kicked the proverbial can of sequestration down the road by two months, worsening already existing uncertainty about agency spending levels, according to contractors and budget analysts.

By postponing but not replacing the across-the-board automatic cuts that the 2011 Budget Control Act slated to go into effect on Wednesday, lawmakers who crafted the primarily tax-oriented bill that cleared the House late Tuesday night ratcheted up the pressure on agency managers and private providers of services to government.

“What the press tended not to explain is that the size of the sequestration was reduced by 22 percent or two-ninths,” said Richard Kogan, a senior fellow at the Center for Budget and Policy Priorities. “So instead of squeezing a sequestration of size X into nine months, you would be squeezing a sequestration that is two-ninths smaller into seven months.”

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