A Cliff Still in Sight

The American Taxpayer Relief Act of 2012, signed into law on Jan. 2, did not resolve many of the issues at play in the “fiscal cliff” debate and merely changed the terms of the Budget Control Act’s looming sequester, said Todd Harrison, a leading expert on defense budgeting issues with the Center for Strategic and Budgetary Assessments. What the ATRA did do was delay sequestration by two months, reduce the sequester’s mandatory defense spending cuts in proportion to the delay, and slightly change the way the sequester’s budget caps are applied in Fiscal 2013, Harrison told reporters in Washington, D.C., during a Jan. 9 briefing. ATRA pushed back the date of the sequester taking effect to March 1 from Jan. 2, with the second phase of the cuts hitting on March 27 for any remaining budget authority in excess of the sequester’s caps, he said. The act also reduced and redefined the sequester’s budget caps. Originally, the BCA capped defense at $546 billion in Fiscal 2013, and $556 billion in Fiscal 2014. The ATRA reduced those caps by $2 billion and $4 billion, respectively, said Harrison. ATRA also reduced the amount of the sequester penalty for defense in Fiscal 2013 from $54.7 billion to $42.7 billion, he said. DOD would have to apply those spending cuts over the remaining months of the fiscal year. (See CSBA’s backgrounder.)