Agencies avoid slashing salaries in across-the-board cut

Federal agencies generally avoided dipping into their salaries and expenses accounts to meet an across-the-board cut in fiscal 2000 budgets required by Congress.

The Clinton administration revealed how agencies applied the 0.38 percent across-the-board cut to their budgets in the President's fiscal 2001 budget proposal. The nearly $2.4 billion in cuts were required by last year's budget agreement.

Every department and agency of the federal government had to take a cut. Under the agreement, agencies were not allowed to cut any particular program by more than 15 percent. The agreement also prevented the Defense Department from cutting into military personnel accounts. The Office of Management and Budget, in its instructions to agencies on applying the cuts, asked managers to avoid laying off any employees.

Most agencies avoided touching salaries and expenses, but some did cut into these accounts. The Patent and Trademark Office, for example, cut its salaries and expenses by about $3 million from its original budget plan for 2000.

The Defense Department applied 43 percent of its more than $1 billion cut to operations and maintenance accounts for the Army, Navy and other components.

In some civilian agencies, certain accounts bore the brunt of cuts. Nearly 70 percent of the Education Department's cuts, $70.2 million, were made to the Office of Student Financial Assistance's programs. The Justice Department applied 80 percent of its cut to state and local law enforcement assistance programs, while the Transportation Department put 60 percent of its cut into federal highway funding. The Internal Revenue Service slashed $32 million from its processing, assistance and management account.

The entire Veterans Affairs Department cut was applied at the Veterans Health Administration.

The administration's report on the cuts was included in Chapter 21 of the Analytical Perspectives section in the President's budget proposal.

Major Agencies' Total Budget Rescissions
(in millions of dollars)

Source: President Clinton's Fiscal 2001 Budget