DOD, OMB lay plans for fiscal cliff

The Office of Management and Budget sent guidance to agencies on Dec. 20 outlining the potential impact of across-the-board budget cuts that could slash billions from federal spending as the country teeters closer to the fiscal edge.

Although leaders in Washington say they are still committed to closing the divide between Democrats and Republicans on a deficit reduction plan, sequestration is scheduled to take effect on Jan. 2, and lawmakers are now ajourning for a short break over the Christmas holiday, which leaves only a matter of days to resolve their differences, FCW.com reported.

The Pentagon released a memo from Defense Secretary Leon Panetta that is similar to those other agencies reportedly furnished to their employees while addressing issues specific to the military.

“Sequestration was never intended to be implemented, and there is no reason why both sides should not be able to come together and prevent this scenario,” Panetta wrote in the DOD memo. “Nevertheless, with only a couple of weeks left before sequestration could occur should a deal not be reached, it is important to clarify the potential implications.”

According to a source who spoke to FCW.com on background, OMB’s document indicates that the agency is taking steps to ensure the Obama administration is ready to act should negotiations fail, and it should not be considered a change in commitment to reaching an agreement.

“OMB has instructed agencies to begin communications with their employees about what to expect if a sequestration order is issued and about potential personnel actions, such as furloughs, that might be necessary in the months ahead,” the source said. “OMB is simply ensuring that the administration is prepared.”

The memos and other guidance come as House Majority Leader John Boehner’s Plan B for tax cuts failed on the evening of Dec. 20, and President Barack Obama is now forced to come up with other alternatives