The President Has the Legal Power to Avoid Spending Cut Damage….So, What’s His Problem?

And when the Republicans opened the seventh seal of the sequester, there was a great earthquake; and the sun became black and the stars fell unto the Earth; and our nation’s ability to forecast severe weather, such as drought events, hurricanes and tornados, was seriously undermined. Lo, and the children were not vaccinated, and all the beasts starved in the zoos, and the planes were grounded.

Or so President Obama and his Cabinet prophets have been preaching ahead of the automatic budget cuts due to begin Friday. The bit about the weather is a real quote from the White House budget director.

But if any of these cataclysms do come to pass, then they will be mostly Mr. Obama’s own creation. The truth is that the sequester already gives the White House the legal flexibility to avoid doom, if a 5% cut to programs that have increased more than 17% on average over the Obama Presidency counts as doom.

According to Mr. Obama and his budget office, the sequester cuts are indiscriminate and spell out specific percentages that will be subtracted from federal “projects, programs and activities,” or PPAs. Except for the exemptions in the 2011 budget deal, the White House says it must now cut across the board regardless of how important a given PPA is. Food inspectors, say, will be treated the same as subsidies for millionaire farmers.

Not so fast. Programs, projects and activities are a technical category of the federal budget, but the sequester actually occurs at the roughly 1,200 broader units known as budget accounts. Some accounts are small, but others contain hundreds of PPAs and the larger accounts run to billions of dollars. For the Pentagon in particular, the distinction between PPAs and accounts is huge. This means in most cases the President has the room to protect his “investments” while managing the fiscal transition over time.

Congress might have intended for the sequester to apply to PPAs, but they also wrote a sloppy law at the 11th hour. The Budget Control Act of 2011 disinterred the lapsed sequester rules of the Gramm-Rudman Deficit Control Act of 1985, though without anyone looking at the details.

Gramm-Rudman said the sequester applies to accounts, not PPAs, under a temporary “part-year” budget. As it happens the government is operating under just such a continuing resolution now, not a normal appropriations bill. If Congress returned to regular order in 2014 or later, the sequester would indeed trickle down to PPAs.

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