Transcript: OMB Controller Daniel Werfel’s testimony on impacts of sequestration before the Senate Appropriations Committee

Transcript of testimony by Daniel Werfel, Federal Controller at the Office of Management and Budget, on the impacts of sequestration. The Senate Appropriations Committee hearing was held on Feb. 14, 2013:

…I am here today to discuss the automatic spending reductions, known as sequestration, currently scheduled to occur on March 1 as well as the impacts of these reductions and the actions the administration is taking to prepare to implement sequestration should it be necessary.

I want to start today by reiterating a point that the administration has made on numerous occasions: Sequestration is bad policy and the administration believes that Congress should pass balanced, bipartisan deficit reduction to avoid it.

If allowed to occur, sequestration would have significant and destructive consequences for domestic investments, national security, and core government services.

The cuts required by sequestration harm middle-class families, seniors, and the most vulnerable. The President believes that these indiscriminate across-the-board cuts are not a responsible way to address our collective goals of balanced deficit reduction.

Working together with Congress, we have already made significant progress in this regard, enacting more than $2.5 trillion of deficit reduction over the past 2 years.

The vast majority of this progress has come in the form of spending cuts, with roughly $3 in spending cuts for every $1 in additional revenue.

The President believes that we need to have a balanced approach to further deficit reduction that includes spending cuts but also includes common-sense tax reform that can raise additional revenue.

As part of the American Taxpayer Relief Act of 2012, the date on which the President would have to issue a sequestration order was delayed by 2 month, from Jan. 2, 2013 to March 1, 2013. This delay was paid for in a balanced manner with $24 billion in deficit reductions split evenly between additional revenue and spending cuts. This approach set an important precedent of avoiding sequestration through balanced deficit reduction that combines additional revenue and spending cuts.

Should Congress fail to act in the next 2 weeks, a sequestration of approximately $85 billion will be ordered for the remainder of fiscal year 2013, split evenly between defense and non-defense programs. This will lead to a number of deeply troubling consequences in critical government programs that we all depend on.

It would mean fewer teachers to educate our children, less funding for schools to help disadvantaged students – children with disabilities, less research into life-threatening diseases.

It would cut nutrition assistance for vulnerable populations and reduce funding for essential mental health programs.

It would keep federal agencies from conducting the inspections necessary to keep our food, our air, and our water safe and clean.

It would make our country less secure at home, reducing our ability to protect our borders, stay ahead of emerging cyber-security threats and keep crime off our streets and out of our neighborhoods.

And it would make us less safe abroad by causing critical degradations in the support for and readiness of our armed forces.

There is no amount of planning that can avoid these damaging impacts.

Prudence dictates, however, that the federal government take all reasonable steps to be ready to implement sequestration in the most responsible way possible. Accordingly, federal agencies and OMB have been engaged in ongoing planning activities for months to determine how to operate under a potential sequestration, keeping in mind our primary responsibility to execute our core mission areas on behalf of the American people.

Let me assure that should a sequestration order have to be issued by the President on March 1, we will be ready to implement the law.

But let me also reiterate: No amount of planning or preparation on our part – no matter how thorough or careful – can mitigate the significant and highly destructive impacts that sequestration would have. Sequestration is not a responsible long-term solution for deficit reduction.

The long-term solution is a balanced approach of spending reductions and revenues that builds upon the significant deficit reduction we have already worked together to achieve to strengthens the middle-class, protects the investments critical to our nation’s continued growth and prosperity, and avoids sequestration.

Thank you. I look forward to answering your question.


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One Comment on “Transcript: OMB Controller Daniel Werfel’s testimony on impacts of sequestration before the Senate Appropriations Committee

  1. Pingback: Roundup: Impacts of sequestration on defense & non-defense programs | What The Folly?!

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