02.05.2013 2

Is Hurricane Sandy funding subject to sequestration?

By Robert Romano — Everyone knows that few lawmakers actually take the time to read the laws they are passing. But one might think that an organization treated by the New York Times in this case as an authority on the impending March 1 sequestration cuts due to take place, might have taken the time to do so.

Alas, the Bipartisan Policy Center (BPC), which was quoted in a Feb. 3 Times editorial, “A Million Jobs at Stake,” — more on sequestration’s jobs and economic growth impact later — apparently did not.

The discrepancy occurs in the source the Times uses for its editorial, a BPC piece called, “Now it’s time for sequester anxiety,” which states, “the recently-passed $50.5 billion of Sandy relief aid will be subject to sequestration on the non-defense side…”

To be fair, this might have actually been a typo in BPC’s blog post.

But even if it were a mistake, they sure fooled the Times’ editorial board, which repeated, “Even the aid just approved for victims of Hurricane Sandy will fall under the sequester’s ax.”

That must have been quite a shock to South Carolina Republican Representative Mick Mulvaney, who fought to offset $17 billion of hurricane disaster relief, and to the 258 representatives in the House who defeated his amendment to the bill that would have done so.

Or to Utah Republican Sen. Mike Lee, whose amendment to cut the budget across the board by 1 percent to pay for disaster relief was defeated by a vote 35 to 62.

To set the record straight: in the hurricane disaster relief bill itself, in section after section are provisions explicitly exempting Hurricane Sandy from being subjected to sequestration.

If it were otherwise — and this author is no lawyer, but the House and Senate are full of them — Congress then voted to pay for every dime of hurricane disaster relief unbeknownst to them.

If it were otherwise, at Americans for Limited Government, which supported these attempted offsetting cuts by Mulvaney and Lee, there would have been no reason to block the aforementioned legislation.

Of course, it is not otherwise. How could it be?

In fact, almost every single section of the bill appropriating money reads something like, “That such amount is designated by the Congress as being for an emergency requirement pursuant to” the Budget Control Act (BCA) of 2011.

By designating the spending as emergency or disaster-related, under the BCA, the provision requires the Office of Management and Budget (OMB) to adjust upwards the spending limits allowed by the amount of the respective appropriation. Meaning they’re exempted.

Even the Associated Press caught this nuance after the legislation passed: “As with past natural disasters, the Sandy aid bill is not offset with spending cuts, meaning the aid adds to the deficit. The lone exception is an offset provision requiring that $3.4 billion for Army Corps of Engineers projects to protect against future storms be covered by an equal amount of unspecified spending cuts in other programs before next October.”

A recent Congressional Research Service report outlined how this little-known process of offsetting sequestration cuts works, and how they may occur in the future if the spending caps are breached: “Title I of the BCA established discretionary spending limits, or caps, for each of FY2012-FY2021. If Congress appropriates more than allowed under these spending limits in any given year, the automatic reduction process of sequestration would cancel the excess amount.”

But as a result of the aforementioned exemptions, nearly everything in the Hurricane Sandy spending bill will breach the spending caps provided for under the BCA — in this case adding some $50.5 billion to the deficit over the next ten years.

It makes one wonder what use a statutory spending cap is if the process is so easily overridden..

On the other hand, such a provision would appear to enable budget hawks to vet all future spending bills for such sequestration exemptions. Now, activists can fight to ensure that no bill in the future should be voted on that tries to get around these automatic offsetting spending cuts.

Which brings us back to the Times’ editorial and the Bipartisan Policy Center that are ominously warning of a million jobs being lost should sequestration be allowed to go into effect. They’d like to cancel sequestration altogether.

The Times claims that spending cuts’ “overall impact on the economy would be the same” whether they come in defense or non-defense programs. They warn the result is less growth and more jobs lost.

It therefore follows that the impact should also be the opposite for any spending increases.

Well, since they apparently failed to read the hurricane and sequestration bills properly, in fact, they already got their wish.

Unless we are wrong, sequestration for 2013 — $53.8 billion of actual cuts in government outlays for the fiscal year — has already been pretty much offset by $53.4 billion of spending increases this fiscal year in the hurricane bill and the fiscal cliff deal.

If so, sequestration has already been canceled for this year. If unemployment goes up anyway and growth is slow in 2013, what will the Old Gray Lady say next to justify yet more spending?

Robert Romano is the Senior Editor of Americans for Limited Government.

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