Sequestration 2018 who is affected

State grants program provides federal matching funds to state vocational rehabilitation agencies to assist individuals with physical or mental impairments to become gainfully employed. Vocational rehabilitation state grants is a core program of the workforce development system under the Workforce Innovation and Opportunity Act and a partner in the one-stop service delivery system for accessing employment and training services. These payments are subject to the FY 5. Program management activities include funding for program operations, survey and certification, the Clinical Laboratory Improvement Amendments, Medicare Advantage, Medicare Part D coordination of benefits, recovery audit contracts, and other administrative costs.

Federal law establishes several broad goals for the SSBG: promoting self-sufficiency, eliminating dependency, preventing child abuse, supporting community-based care for the elderly and disabled, and supporting institutional care when necessary.

The SSBG is an annually appropriated capped entitlement to states. In FY, the largest expenditures for services under the SSBG were for foster care, child protective services, child care, and special services for the disabled. Funds for strengthening markets, income, and supply—also known as the "Section 32" account. Sequestration reduces the availability of spending authority from the Assets Forfeiture Fund—a Department of Justice repository for forfeited cash and proceeds of sales of forfeited property.

Origination fees made during a period of sequestration must be increased by the uniform percentage specified in the sequestration order. Loan origination fees are deducted proportionately from each disbursement of the loan proceeds to the borrower. Animal and Plant Health Inspection Service salaries and expenses, from customs user fee collections. The Federal Aid in Wildlife Restoration Act, also known as the Pittman-Robertson Wildlife Restoration Act, created a program to fund the selection, restoration, rehabilitation, and improvement of wildlife habitat, hunter education and safety, and wildlife management research.

The National Highway Performance Program is a formula-based program that applies federal resources to support the performance of and construction of new facilities on the National Highway System and the achievement of performance targets. Sequestration limits direct interest payment subsidies to issuers of certain qualified school construction bonds.

The fund reimburses federal agencies for relocation costs incurred due to the reallocation of frequencies from federal to nonfederal commercial use or the sharing of their federal frequencies. Sequestration reduces the federal unemployment benefits and allowances account that funds the Trade Adjustment Assistance for Workers program, which provides income support and job training for workers adversely impacted by increased international trade.

Sequestration reduces the availability of spending authority from the Treasury Forfeiture Fund to disrupt and dismantle criminal enterprises. Sequestration reduces budgetary resources available to CFPB to conduct rulemaking, supervision, and enforcement of federal consumer financial laws.

Sequestration reduces the availability of spending authority from the DEA's Diversion Control Fee Account, which was set up to ensure that adequate supplies of controlled drugs are available to meet legitimate medical, scientific, industrial, and export needs while preventing, detecting, and eliminating diversion of these substances to illicit traffic.

Sequestration reduces funds available to the Tennessee Valley Authority, which is charged with improving the quality of life in the Tennessee Valley through integrated management of the region's resources. The purpose is to decrease or preclude U. Revenues from the sales of excess commodities are either deposited into the Transaction Fund or transferred to the Treasury. Sequestration reduces funds available to the Affordable Housing Program, which uses contributions from each of the Federal Home Loan Banks to subsidize the cost of affordable homeownership and rental housing.

The Maternal, Infant and Early Childhood Home Visiting Program provides comprehensive services to support families of children under the age of five who are in at-risk communities or have selected risk factors. These activities are administered by HRSA. This fund was established in as a result of the consolidation of Defense commissaries. The trust fund pays commissary costs to acquire, construct, and maintain the physical infrastructure of commissary stores and central processing facilities.

Reduces the availability of budgetary resources authorized to restore the Gulf Coast after the Deepwater Horizon oil spill. Thompson II. Cooper and David H. Hogue, Marc Labonte, and Baird Webel. Stern, Pervaze A. Sheikh, and Jonathan L. Appendix C. Sequestration Order for FY All sequestrations shall be made in strict accordance with the requirements of section A of the Act and the specifications of the Office of Management and Budget's report of March 18, , prepared pursuant to section A 9 of the Act.

Appendix D. Each year through FY, concurrent with transmittal of the President's budget, OMB transmits to Congress a report explaining the Joint Committee reductions for the upcoming fiscal year.

The footnotes appearing in this Appendix are from the OMB report. This report provides OMB's calculations of the reductions to the discretionary spending limits "caps" specified in section c of BBEDCA for FY and a listing of the FY reductions required through sequestration for each nonexempt budget account with direct spending.

Additionally, the Joint Committee reductions require sequestration reductions to nonexempt direct spending of 2. The annual reduction is further allocated between discretionary and direct spending within each of the function groups.

Once the reductions are allocated, separate methods are used to implement the reductions for discretionary appropriations and direct spending. Table D Calculation of Total Annual Reduction by Function. Discretionary Reductions. The base for allocating reductions to discretionary appropriations is the discretionary spending limit for FY set forth in section c. The reductions are implemented by lowering the discretionary spending limits for the revised security defense category and the revised nonsecurity nondefense category.

Direct Spending Reductions. Pursuant to paragraphs 3 and 4 of section A, and consistent with section 6 of the Statutory Pay-As-You-Go Act of , the base for allocating reductions to budget accounts with direct spending is the sum of the direct spending outlays in the budget year and the subsequent year that would result from sequestrable budgetary resources in FY Estimates of sequestrable budgetary resources and outlays for budget accounts with direct spending are equal to the current law baseline amounts contained in the President's FY Budget, and include direct spending unobligated balances in the defense function 40 and Federal administrative expenses that would otherwise be exempt.

The majority of estimated direct spending unobligated balances in the defense function are in Department of Defense accounts. The Department of Defense estimates of unobligated balances as of October 1, , are consistent with the estimates in the FY Budget. For purposes of applying the Joint Committee sequestration to direct spending under BBEDCA, "administrative expenses" for typical Government programs are defined as the object classes for personnel compensation, travel, transportation, communication, equipment, supplies, materials, and other services.

For Government programs engaging in commercial, business-like activities, administrative expenses constitute overhead costs that are necessary to run a business, and not expenses that are directly tied to the production and delivery of goods or services. The reductions to direct spending are implemented through sequestration of nonexempt budgetary resources. Pursuant to sections A 6 , , and , most direct spending is exempt from sequestration or, in the case of the Medicare program and certain other health programs, is subject to a 2 percent limit on sequestration.

Steps 1 and 2 on Table D-2 show the calculation of the reduction required for discretionary appropriations and direct spending within the defense function. Steps 3 and 4 on Table D-2 reflect the implementation of the reductions calculated in steps 1 and 2 through an adjustment to the discretionary spending limit for the defense category and a sequestration of direct spending in the defense function.

Discretionary appropriations comprise approximately 98 percent of the total base in the defense function. Defense Function Reduction.

Steps 1 and 2 on Table D-3 show the calculation of the reduction required for discretionary appropriations and direct spending within all other functions besides nondefense function. The calculation is more complicated than the calculation for the defense function due to a two percent limit in the reduction of Medicare non-administrative spending and a special rule for applying the reduction to student loans.

Steps 3 and 4 on Table D-3 reflect the implementation of the reductions calculated in steps 1 and 2 through an adjustment to the discretionary spending limit for the nondefense category and a sequestration of direct spending in the nondefense function.

Discretionary appropriations account for Nondefense Function Reduction. Appendix E. Veterans' compensation, pensions, life insurance Refundable income tax credits OMB maintains a list of the various contingency plans federal agencies will follow during a shutdown. Most have been updated within the past three years, but some have not been updated since a shutdown threat in late A full shutdown would be more extensive than the partial shutdown that started in December when Congress had enacted 5 of the 12 appropriations bills.

A full shutdown would likely be similar to recent ones in and early when approximately , out of 2. In , most of the , civilian employees at the Department of Defense were summoned back to work within a week.

Furloughed employees are not allowed to work and do not receive paychecks but are guaranteed back pay due to legislation passed in January Federal contractors have historically not received back pay. At the beginning of the partial shutdown, an estimated , employees were furloughed, a smaller number than usual since large federal employers such as the Department of Veterans Affairs and the Department of Defense were already funded. Another , employees reported to work but did not receive pay until the shutdown ended.

As the shutdown continued, departments and agencies such as the IRS and State Department recalled an increasing number of employees. Whereas discretionary spending must be appropriated every year, mandatory spending is authorized either for multi-year periods or permanently.

Thus, mandatory spending generally continues during a shutdown. However, some services associated with mandatory programs may be diminished if there is a discretionary component to their funding.

For instance, during the shutdowns and the shutdown, Social Security checks continued to go out. However, staff who handled new enrollments and other services, such as changing addresses or handling requests for new Social Security cards, were initially furloughed in In , certain activities were discontinued, including verifying benefits and providing new and replacement cards, but processing of benefit applications or address changes continued. During the shutdown, the Department of Agriculture had to rely on a special authority included in the previous CR to allow them to continue to issue SNAP benefits.

The hours-long lapse in appropriations in February , though sometimes characterized as a shutdown, did not result in federal employee furloughs.

However, before , the government did not shut down but rather continued normal operations through six funding gaps. Since , 10 funding gaps of three days or fewer have occurred, mostly over a weekend when government operations were only minimally affected.

The first two happened in the winter of when President Bill Clinton and the Republican Congress were unable to agree on spending levels and the government shut down twice, for a total of 26 days. The fourth shutdown, starting in December and continuing into January , centered on a dispute over border wall funding and was the longest-lasting shutdown at 35 days. While estimates vary widely, evidence suggests that shutdowns tend to cost, not save, money for a number of reasons.

For one, putting contingency plans in place has a real cost. In addition, many user fees and other charges are not collected during a shutdown, and federal contractors sometimes include premiums in their bids to account for uncertainty in being paid. While many federal employees are forced to be idle during a shutdown, they have historically received and are now guaranteed back pay, negating much of those potential savings.

Shutdowns also carry a cost to the economy. On top of that effect, CBO notes that longer shutdowns negatively affect private-sector investment and hiring decisions as businesses cannot obtain federal permits and certifications, or access federal loans.

Theoretically, the House and Senate Appropriations committees are supposed to pass 12 different appropriations bills that are broken up by subject area and based on funding levels allocated in a budget resolution. To avoid a shutdown, Congress would need to pass all 12 appropriations bills through both chambers and get them signed by the President before October 1.

This could be done by enacting each bill individually or by packaging them together through an omnibus or minibus. On September 21, the House passed a continuing resolution that would extend current funding levels through December 3 and suspend the debt limit until near the end of Senate action is uncertain, however, due to the lack of needed Republican support for raising the debt limit under regular Senate rules as well as specific funding disagreements, including appropriations for the Iron Dome missile defense system in Israel.

For more about the status of specific appropriations bills, see Appropriations Watch: FY Most Medicare administrative spending is discretionary, however, and thus not subject to this sequester.

The 2 percent cut is a reduction in payments to Medicare providers and plans and has been in place every year since Beneficiaries see few direct impacts, as the sequester does not affect their benefit structure. First, it temporarily suspends the Medicare sequester from taking effect between May 1, and December 31, This means that Medicare plans and providers would receive an increase in payment rates of approximately 2 percent more than what they otherwise would have received during this time.

Second, it extended the mandatory sequester for one additional year. This means that mandatory spending for all non-exempt programs, including Medicare and non-Medicare, will be reduced through Skip to main content.

You are here. Download PDF » 1. What sequester mechanisms are currently in play? How is the aggregate mandatory sequester determined? How is the mandatory sequester allocated? What programs are exempt?