The reason is that the version of sequestration that Congress cooked up in last year’s budget negotiations affects budget authority, not actual checks that go out the door of the Pentagon, usually referred to as “outlays” in federal budget- speak. And since different types of accounts spend money at different rates, the effect of the across-the-board cuts would be spread out over several years in some accounts and happen right away in others.
While every account in DoD would have to come down by 10.3 percent in terms of budget authority next year, according to Harrison’s number-crunching, actual money-out-the-door from its overarching “procurement” budget will only fall by 3.5 percent.
“This shouldn’t be news to anyone, “Harrison said. “We know that outlays for procurement don’t happen immediately. People in the defense industry know this, and when they tell you that their labor force will have to be reduced by 10 percent as a result of sequestration, it’s true, it just doesn’t happen in January of 2013. It’ll happen in the months and years that follow.”
But since DoD’s operations and maintenance (O&M) accounts tend to get drained in the same year in which Congress grants budget authority to the department, functions that are paid with O&M money will take a hit next year that’s more than double what contractors who are paid from procurement accounts will experience.