The haircut in Treasury cash grants under “sequestration” will be approximately 5.3% for fiscal 2013 rather than the 7.6% announced earlier.
The Office of Management and Budget will have to calculate the exact figure.
The haircut should return to a different figure after this fiscal year.
The government operates on a September 30 fiscal year.
The reason for the smaller 2013 haircut is when Congress voted on January 1 to delay the start of sequestration by two months as part of a deal to avert the fiscal cliff, it paid for the delay by agreeing to $24 billion in specific spending cuts and tax increases. Sequestration will require $109 billion in spending cuts each year for nine years starting in 2013. However, because Congress made $24 billion of the $109 billion in 2013 savings, smaller savings are required for the remainder of the year.
Several statements made on a solar industry call this week about sequestration appear to be incorrect.
The fiscal cliff bill did not delay the start of sequestration to March 27. The start of sequestration for Treasury cash grants is March 1. The March 27 deadline applies to a separate set of automatic spending cuts that kicks in potentially on March 27 if the money Congress has appropriated for federal agencies for the remainder of this year is above spending caps. Congress has had standing orders for automatic spending cuts each year since 1985 if spending exceeds annual budget caps. However, these cuts are rarely allowed to take effect. Confusingly, these automatic spending cuts are also called sequesters.
Another statement on the solar call was that government agencies have discretion to delay sequestration by up to 120 days. This does not appear to be correct.