Will the fiscal cliff turn into a mere step off the curb for the Pentagon? It may depend on the definition that the administration's accountants use in applying the Budget Control Act to defense -- a definition about which there seems to be disagreement.
The Office of Management and Budget put out its sequester report ten days ago, saying it could not provide details on how the budget sequester would affect government "programs, projects, and activities (PPA)," the way last year's Budget Control Act requires, because Congress only gave the agency 30 days to complete the report. The number-crunchers just didn't have time to get their institutional arms around the definition of PPA and wrestle the details to the ground, according to OMB.
So their report only assessed the impact of sequestration at the level of "accounts," of which there are about 50 in the Pentagon budget -- Air Force aircraft procurement, Navy operations and maintenance, etc. Every one of these accounts has multiple programs tucked inside -- specific weapons systems, for example -- and OMB implied that each of those programs would be hit in a sequester with a 9.4 percent cut.
OMB is still working on exactly what PPA means across the government, but yesterday in an offhand comment Pentagon Comptroller Bob Hale was reported as saying that the OMB document "would give us more flexibility" because it might allow DOD "accounts" to be defined as the PPA.
If Hale's interpretation survives the day, DOD would have an early holiday present. And it would put out the firestorm being whipped up both by the secretary of defense and by such Republican stalwarts as John McCain, Lindsey Graham, and Buck McKeon, who have been running a high-volume mini-campaign about the fiscal cliff, warning about job losses, plant closures, and layoff notices -- all backed up by the Aerospace Industries Association's warning about a million defense jobs being lost in the event of sequestration.