Defense

July 18, 2012

Sequestration threatens fiscal 2013 funds, official says

by Amaani Lyle
American Forces Press Service

While current Defense Department contracts funded with fiscal year 2012 dollars remain unaffected by sequestration, the looming threat of the budget-cutting maneuver means funding for all DOD contracts in fiscal year 2013 is at risk of being cut, Pentagon Press Secretary George Little told reporters today.

Little responded to questions about the fate of DOD contracts once sequestration, set to occur in January, cuts an additional $500 billion in defense funding beyond DOD’s previously agreed upon $487 billion. The automatic budget cuts, part of legislation last year that raised the U.S debt ceiling, is set to slash spending across the federal government unless Congress intervenes.

“Sequestration cuts would not affect current contracts funded with fiscal 2012 dollars, that is, obligated funds,” Little said. “Anything put on contract between now and Sept. 30 – the end of the fiscal year – would also not be affected.”

But funding for all defense contracts put into place between Oct. 1 and Jan. 1, Little said, would be subject to sequestration as called for by the Budget Control Act.

“We are obviously assessing the potential impacts of sequestration; we are not planning for sequestration,” Little said. “But clearly we do need to take a look at contracts and take that into account should sequestration go into effect.”




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