The Budget and Accounting Act of 1921 requires the President to submit his budget request for the upcoming fiscal year no later than the first Monday of February. Recently, however, the White House's Office of Management and Budget (OMB) announced it will delay the scheduled Feb. 4 release of the president’s fiscal year 2014 budget request until early March or later. According to the House Budget Committee, the Obama Administration has missed the deadline on three of its four previous budget submissions. By comparison, President George W. Bush missed it once out of his eight budgets, and President Bill Clinton twice out of eight.
But this is an unusual year, for two main reasons. First, Congress has yet to enact a budget for FY2013, which began on Oct. 1, 2012. Instead, back in September Congress enacted a stop-gap spending measure, known as a continuing resolution, which will keep the government operating until March 27. This failure to enact a FY2013 budget has left OMB without a baseline on upon which to build the FY2014 request.
The second factor is sequestration. The Budget Control Act of 2011 called for Congress to pass legislation to reduce budget deficits by $1.2 trillion over the next decade. Failure to do so would result in a series of automatic across-the-board spending cuts known as sequestration. Originally the deadline for congressional action, which they missed, was Jan. 2, 2013.
Sequestration would reduce discretionary spending in FY2013 by roughly $110 billion, or about 9 percent of total discretionary spending. As part of the recent deal on the fiscal cliff – officially known as the American Taxpayer Relief Act of 2012 – the deadline for sequestration has been extended to March 1. Between now and then Congress has the option to repeal sequestration entirely, delay it further, enact legislation to reduce the federal deficit, or not act and let sequestration kick in.
While less significant than the absence of an FY2013 budget in creating a budget request for next year, the uncertainty about whether sequestration will happen further muddies the budget baseline picture for OMB.
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