Report: White House can buy time to delay spending cuts in fiscal cliff

The White House could use its authority to temporarily delay the spending portion of the fiscal cliff early next year, according to a new report.

Under the August 2011 debt deal, $109 billion in spending cuts are to hit in January. Of these, $55 billion come from defense, $38 billion from non-defense spending and the rest from mandatory and Medicare provider cuts.

These cuts, along with the expiration of existing tax rates, form a fiscal cliff that would shock the economy into a recession, according to the Congressional Budget Office. 

OMB Watch, a non-governmental agency, in a new report argues that should Congress be unable to avoid this sequestration in the lame-duck session, the White House could use its powers to buy a few weeks or a month of extra time in January.

“This paper has described several ways that the president and his administration can, if they choose, manage and mitigate the impact of a short-term sequester in early 2013.  This authority is not unlimited. It depends on sequestration lasting a relatively short period of time – perhaps no more than a month – and on the president and Congress agreeing to cancel sequestration retroactively to the beginning of the year,” the group states. 

However, the group argues that the legal authority, under the Antideficiency Act, is not clear.

A key move would be to use the Office of Management and Budget’s “apportionment” authority. That power allows OMB to accelerate spending within a fiscal year to needy programs. Using this power would allow the current rate of spending to continue, pushing cuts toward the end of fiscal 2013 in September.

The OMB Watch report notes that the Government Accountability Office has issued an opinion saying the use of this power cannot cause a “drastic curtailment” at the year’s end.

OMB can also use leftover funds, accelerate spending to avoid layoffs, delay contracts, delay grants and delay education spending until July.