Patton Boggs Insights - December 2012: Administration/Congress: Sequestration Could Have Big Impact On Agencies

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Federal agencies face the possibility of substantial cuts to their budgets in January unless Congress acts to prevent them.

In what has become known as sequestration, automatic cuts of 8.2 percent will be imposed across the federal government as a way to reduce the nation’s deficit burden. The cuts became more likely after Congress failed to agree on a deficit reduction plan last year. As part of legislation the lawmakers approved to raise the federal debt limit, if no plan is passed, sequestration will occur automatically beginning next year. The reductions are to occur in domestic and military programs equally.

If the cuts take effect, OSHA stands to lose $46 million, which could mean the loss of 81 full-time employees. MSHA would be out about $31 million. The Occupational Safety and Health Review Commission and its MSHA counterpart each would see $1-2 million in cuts. Insiders believe Congress will simply pass a law to delay the required cuts until it has time to craft another solution. Contact Henry Chajet (hchajet@pattonboggs.com, 202-457-6511) or Mark Savit (msavit@pattonboggs.com, 303-830-1776) for further information on sequestration impacts.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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