The Congressional Budget Office today released an analysis of the potential effects of sequestration on the federal budget:
That report must provide estimates of the caps on discretionary budget authority for the current year (in this case, 2012) and for each year through 2021.2 In CBO's estimation, a sequestration (cancellation of budgetary resources), which would be triggered by a breaching of the caps, will not be required in 2012. However, CBO's estimates do not govern the outcome because the Administration's Office of Management and Budget (OMB) has sole authority to determine whether a sequestration is required and, if so, the proportional allocations of any necessary cuts. Those determinations are based on OMB's own estimates of federal spending.
Some defense-related excerpts from the CBO report:
By CBO's estimates, if the automatic enforcement procedures were implemented, they would reduce the caps on discretionary budget authority by declining amounts during the 2014–2021 period. For 2014, the reduction would total $93 billion (or 8.7 percent); it would fall to about $88 billion (or 7.1 percent) for 2021. The reductions in the caps for defense programs would be proportionately larger than the reductions in the caps for nondefense programs. The defense cap would shrink by $55 billion each year (that is, by 9.8 percent for 2014 and by slightly smaller percentages for subsequent years). The nondefense cap would drop by $38 billion (or 7.4 percent) for 2014 and by smaller amounts for later years.
The combined limit on discretionary budget authority would decline to $973 billion for 2014 and then steadily increase to $1,146 billion for 2021, when the restrictions specified by the Budget Control Act are set to expire. The separate defense and nondefense caps would follow a similar pattern. For 2013, the cap on discretionary budget authority for the defense category is $546 billion (although sequestration would result in funding below that amount). That limit would decline, in CBO's estimation, to $501 billion for 2014 and then gradually increase to $589 billion for 2021. The cap on nondefense funding is $501 billion for 2013 (before any effects of sequestration) and $472 billion for 2014; after that year, the limit would gradually rise to $557 billion for 2021. (Those figures do not include any adjustments that might be made to accommodate appropriations for emergencies, overseas contingency operations, disaster relief, or program integrity initiatives.)