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Federal Agencies Brace for Deep Cuts Post-‘Cliff’


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Ingram Publishing/Thinkstock(WASHINGTON) — With the “fiscal cliff” quickly approaching, federal agencies are stepping up preparations for deep automatic budget cuts that will kick in Jan. 2 unless the White House and Congress can reach a deal.

The Office of Management and Budget told ABC News that a memo went out to federal agencies earlier this week seeking “additional information and analysis” in order to finalize spending cuts required if we go off the cliff.

The agencies are considering which workers to furlough, projects to put on hold and offices that will have to close.

The request follows the administration’s release of a 400-page report in September that outlined the budget areas to be impacted by the $1.2 trillion in automatic spending cuts and what percentages they would be slashed. (More on that HERE.)

Billions of dollars could be slashed from defense operations and maintenance programs. Medicare would take a two-percent hit, trimming millions in payouts to health care providers. Scientific research programs would be gutted. Aid for the poor and needy would be sharply curtailed.

The report also detailed operations that would be exempt from any cuts, including active-duty military operations, nuclear watchdogs, homeland security officials, veterans care and other critical areas.

Asked about the agency preparations underway, White House spokesman Jay Carney said Wednesday that OMB “must take certain steps to ensure the administration is ready to issue such an order should Congress fail to act.”

“Earlier this week, OMB issued a request to federal agencies for additional information to finalize calculations on the spending reductions that would be required,” Carney said.

“This action should not be read … as a change in the administration’s commitment to reach an agreement and avoid sequestration.  OMB is simply ensuring that the administration is prepared, should it become necessary to issue such an order,” he said. “OMB will continue to consult with agencies and will provide additional guidance as needed.  This is just acting responsibly because of the potential for this happening.”

Copyright 2012 ABC News Radio