Agencies facing reduced budgets if Obama issues sequestration order

By Annette Cary, Tri-City HeraldJanuary 16, 2013 

The White House is telling the Department of Energy and other agencies to make plans for a reduced budget for the fiscal year that began three months ago.

Unless Congress amends the law, President Obama is required to issue a sequestration order March 1 and cut about $85 billion from fiscal 2013 spending.

"At this time, agencies do not have clarity regarding the manner in which Congress will address these issues or the amount of budgetary resources that will be available through the remainder of the fiscal year," said a memo late Monday from Jeffrey Zients, the Office of Management and Budget deputy director for management.

It outlined the guiding principles for making plans for sequestration and suggested that some limited action to cut costs might need to be taken before March 1.

The DOE Environmental Management budget, which includes money for environmental cleanup of the Hanford nuclear reservation, could be cut 8 percent to 10 percent for the entire year unless Congress acts to cut spending to address the federal budget deficit.

Congress avoided sequestration Jan. 2 by delaying it until March through passage of the American Taxpayer Relief Act of 2012.

Most local DOE contractors, including at Hanford and the Pacific Northwest National Laboratory, have been anticipating a budget impact because of possible sequestration, said Gary Petersen, Tri-City Development Council vice president of Hanford programs.

If sequestration is not avoided, it will slow the schedule of work, lead to delays and increase costs over time, he said.

The OMB memo required agencies such as DOE to identify ways to reduce nonfederal staff costs where possible, including imposing hiring freezes, authorizing voluntary layoffs or early retirements and requiring administrative furloughs.

Agencies also were told to review contracts to determine where costs can be reduced.

Agencies generally should only be preparing to take actions to meet possibly reduced budgets, but some immediate actions also may be needed, the memo said.

"Agencies presented with these circumstances should continue to act in a prudent manner to ensure that operational risks are avoided and adequate funding is available for the remainder of the fiscal year to meet the agency's core requirements and mission," the memo said.

The uncertainty for federal agencies is compounded by the lack of a federal budget passed for the year. The nation is operating under a continuing resolution approved through March 27, 2013.

-- Annette Cary: 582-1533; acary@tricityherald.com; Twitter: @HanfordNews

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