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I n t e g r i t y - S e r v i c e - E x c e l l e n c e Headquarters U.S. Air Force Unclassified// FOUO Unclassified// FOUO 1 Julie Hogan SAF/AQPM 9 Jul 13 Sequestration 101
I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Headquarters U.S. Air ForceUnclassified//FOUO
Unclassified//FOUO 1
Julie HoganSAF/AQPM
9 Jul 13
Sequestration101
Overview
Do Ask QuestionsDo Take NotesEnsure you claim CLP/CLU (8)DO NOT FALL ASLEEP
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Background Federal Budget Process Appropriation vs. Authorization Types of Funding Continuing Resolution
Defense Budget
Budget Control Act
Sequestration
Illustration
President’s Budget (PB)
Requests funds to run Government Includes operations, research & development, procurement
Begins authorization and appropriations cycle Usually submitted to Congress First Monday in February
After State of the Union Address Explained to Congress through additional
documentation and hearings
How Defense Bills Become Laws: The Products
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President’s Budget (PB)Sent to Congress in February CONGRESS SENATE
Passes DoD APPROPBILL
SENATEPassesDoD AUTHBILL
Bill as passed• May include
amendments
Bill as passed• May include
amendments
Bill as passed• May include
amendments
Bill as passed• May include
amendments
HOUSEPasses DoD AUTHBILL
HOUSE Passes DoD APPROPBILL
Final DoD Approps Bill
Final DoD Auth Bill
CONGRESS
CONGRESS
AUTHORIZATIONPROCESS
SASC
HASC
SAC-D
HAC-D
Draft BillCommittee Report
Draft Bill Committee Report
Draft Bill Committee Report
Draft Bill Committee Report
APPROPRIATIONSPROCESS
PRESIDENT SIGNS BILL
PRESIDENT SIGNS BILL
DoD AUTH LAW
DoD APPROPS LAW (FEDERAL BUDGET)
Draft Bill Conf Report
AUTH CONFERENCE
APPROPS CONFERENCE
Draft Bill Conf Report
Authorization vs. Appropriation
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Constitutionally mandated Provides budget authority
Permission to draw funds from US Treasury
One-year budget focus Limited language Defense is only 1 of 12 Bills
SAC-D and HAC-D (D = Defense)
Statutorily authorized Provides permission & direction on
how to spend funds Policy oriented Fiscal Year focus Extensive language
Authorization Appropriation
Example: Mom, Can I go to the movies? “Yes, I approve (authorize) you to go, but you cannot see “Zombie Blood Bath” (Prohibitive content)
Authorizers: HASC & SASC(House Armed Services Committee & Senate Armed Services Committee)
Example: Dad, Can I have money to go to the movies? “Yes, here is $20 (appropriated).” (Cannot spend the $20 to see “Zombie Blood Bath” due to Prohibitive Content)Appropriators: HAC & SAC(House Appropriations Committee & Senate Appropriations Committee)
Real-life Definitions
O.K. But you have to wear
a helmet.
I need $200 for a new
bike.
RequestAuthorization
Appropriation
Obligation
OutlayExpenditureSEARS
$200.001 Aug 1997
$200Bank SEARSSEARS
Bike
You can charge it
to us.
SEARS
Types of Funding
RDT&E
ProcurementMILCON
O&MMILPERS
Incremental
Full
Annual
Continuing Resolution Authority (CRA)
Used by Congress to fund government agencies if a formal appropriations bill has not been signed into law by 30 Sep
Allows operations to continue until formal appropriation is approved Can last from a few days to several months
Restrictions under CRA New Starts Quantity Increases
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How Big is the DoD Budget?
I n t e g r i t y - S e r v i c e - E x c e l l e n c e 10
Some Issues
How big should the defense budget be? Percent of gross domestic product? (currently ~4%) Percent of the budget? (currently ~20%)
How do we balance the budget? Raise taxes? Decrease spending?
Where should we cut defense? Cancel programs? Close bases? Reduce personnel/benefits?
I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Budget Control Act
Enacted due to debt ceiling crisis Reduces spending by $1.2 trillion over 10 years (2011-2021) Discretionary spending is capped each year for next decade
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Created “super committee” to make recommendations (tax increases & spending cuts) – failed
As a result, there is an across the board cut to eliminate excess spending (sequester)
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Sequestration
Theory: “Meat-ax” approach to budget-cutting whose consequences were so dire Congress would not let it occur
Reality: It happened! Enacted 1 March 2013 (after extension) Drove $42.7B cut to DoD budget in FY13
I n t e g r i t y - S e r v i c e - E x c e l l e n c e 13
Typical Monthly College Budget
Tuition $1,000Housing 500Food 400Car 200Insurance 175Gas 100Cell Phone 50Entertainment 50Savings 25
$2,500
I n t e g r i t y - S e r v i c e - E x c e l l e n c e 14
10% Budget Reduction
Tuition $1,000 1,000Housing 500 500Food 400 340Car 200 200Insurance 175 100Gas 100 70Cell Phone 50 25Entertainment 50 10Savings 25 5
$2,500 $2,250
I n t e g r i t y - S e r v i c e - E x c e l l e n c e 15
Sequestration (10%)
Tuition $1,000 900Housing 500 450Food 400 360Car 200 180Insurance 175 158Gas 100 90Cell Phone 50 45Entertainment 50 45Savings 25 22
$2,500 $2,250
I n t e g r i t y - S e r v i c e - E x c e l l e n c e 16
Impacts
Tuition – Can’t take a class; may delay graduation Housing – Move to a cheaper place? Get a roommate? Food – Buy cheaper food; eat less Car – Can’t make car payment; defer oil change Gas – Consolidate trips; take bus Insurance – Cancel healthcare policy; assume risk Cell Phone – Use more inefficient processes Entertainment – Have less fun
I n t e g r i t y - S e r v i c e - E x c e l l e n c e 17
Air Force Impacts
Limit supply/IT purchases Defer building maintenance Cancel trips, conferences, training Cancel non-mission flying hours (e.g., airshows, flyovers) Fire temporary employees/impose hiring freeze Furlough civilians one day per week Cancel combat exercises Reduce weapon system sustainment Ground airplanes
I n t e g r i t y - S e r v i c e - E x c e l l e n c e 18
Looking Ahead
One time opportunity to move money between accounts Still waiting for Congress to approve the DoD request
If Congress can’t agree on budget this year, we will sequester again
Continue to trade modernization for readiness
