Over the next few months, we'll be hearing a lot about the possibility of a sequestration that will arbitrarily cut $110 billion out of next year's spending; half from defense and the other half from all other spending. One of the frustrations for Government contractors is the uncertainty that the cuts might have on their programs. Last week, we wrote about one of those uncertainties with respect to whether provisions of the WARN Act apply. Also last week, the President signaled that the military will be exempt from sequestration cuts (good for the military but that means other spending will get hit harder). Also last week, the President signed a law (the Sequestration Transparency Act of 2012) that requires the Executive Branch to detail by September 6, where the spending cuts would take place. (The bill passed both the Senate and House unanimously meaning that the President more or less had to sign it or face a veto override).
The report to Congress required by the Transparency Act should provide a pretty good idea where cuts are likely to come from, in the event of a sequestration. The Act requires a fair amount of reporting specificity including reductions at the program, project, and activity level. The report must also identify all exempt discretionary accounts and all exempt direct spending accounts.
By September 6th, we should have a pretty good idea of who's ox is going to get gored if there is a sequestration.
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