If White House and congressional budget negotiators fail to agree on a deficit reduction plan by Oct. 1, automatic cuts of $105.7 billion in defense and other programs would be triggered, the administration said.
In its initial report on the potential spending cuts, called sequestration, the administration's Office of Management and Budget said Monday that under current law the cuts would total $85.4 billion.But assuming some likely legislative action before Oct. 1, such as reauthorization of the Food Stamp program and more money to bail out failed savings and loans, "the final sequester report would rise to $105.7 billion if no deficit-reducing legislation were enated," the OMB said.
If automatic cuts occur, the agency said, $52.8 billion would be cut from non-exempt defense programs. That is 43.6 percent of the $121.1 billion in defense spending that is not exempt from the cuts. Another $185.4 billion in Pentagon spending would be exempt from the cuts.
A similar $52.8 billion also would be trimmed from non-exempt domestic spending programs. That represents 40.7 percent of the $125.1 billion that would not be exempt from the cuts on Oct. 1.
While Social Security benefits are exempt from the cuts, Medicare benefits are not. But, under the law, cuts in Medicare cannot be reduced more than 2 percent.
The OMB said 72 percent of the government's spending would be exempt from the cuts, including programs that help poor Americans.
The new numbers are little changed from the administration's midyear economic review in July, which put the estimated deficit for fiscal year 1991, which begins Oct. 1, at $168.8 billion.
Congressional and administration officials have said that they want to avoid the steep automatic cuts.