The White House budget office Thursday told agencies to try to use as much flexibility as they can to blunt the effects of the "sequester" budget cuts that took effect last month.
Danny Werfel, the budget office controller, said sequestration doesn't allow much discretion but said federal law does give some agencies the ability to reprogram or transfer money, and he said those agencies "may have a limited ability to realign funds to protect mission priorities."
"Agencies with reprogramming or transfer authority should continue to examine whether the use of these authorities would allow the agency to minimize the negative impact of sequestration on core mission priorities," Mr. Werfel said in a memo to federal departments and agencies, stressing guidance the administration gave several months ago.
Mr. Werfel said agencies should make sure they aren't depleting reserve funds to bolster operations now while sacrificing long-term priorities.
The memo's timing surprised some lawmakers on Capitol Hill who said it seemed Mr. Obama was stressing flexibility now, while just weeks ago he had said he would veto a bill designed to give him more control over where to cut.
"It is frustrating that it has taken the administration this long to understand that prioritizing programs and the needed cuts is the way to go," said Sen. Patrick J. Toomey, a Pennsylvania Republican who sponsored the flexibility bill.
In his memo Thursday, Mr. Werfel also told federal agencies to stop paying out bonuses or other financial incentives that aren't absolutely required under the law — though he said managers can continue to dole out bonuses for recruitment and retention, and to award employees money if they save on travel costs.
And Mr. Werfel warned agencies not to try to cut the budgets of their independent auditors, the inspector general offices that are assigned to nearly every federal agency and department.
But the flexibility issue has been the biggest point of contention since the $85 billion in cuts went into effect March 1.
Republicans have accused the White House of trying to make sequestration as painful as possible in order to put pressure on Congress to cancel them and instead raise taxes.
Mr. Obama, while pressing ahead with cuts including cancellation of public tours of the White House, has said his hands are tied by the law, which requires the cuts to be spread across nearly every agency and program in the federal government.
In February, when Mr. Obama threatened the veto, the White House was vociferously arguing that sequestration should be canceled and replaced with a new package of tax increases and some spending cuts.
As the cuts took effect last month, agencies said their hands were tied.
Cuts have ranged from closing some visitor centers at national parks to threatening furloughs of slaughterhouse inspectors and Border Patrol agents to closing air traffic control towers at some smaller airports.
But Congress has stepped in to overrule the meat inspector furloughs, voting to add back tens of millions of dollars for inspections in a spending bill last month.
Even though some agencies have authority to rearrange money, they have been reluctant.
In one major cut, U.S. Immigration and Customs Enforcement announced it was releasing immigrants it was holding for deportation.
Members of Congress were furious with ICE Director John Morton's decision, arguing he already had the power to ask Congress for flexibility to "reprogram" money to maintain his full slate of detainees.
Mr. Morton acknowledged he had that authority, but said he didn't want to use it because it would mean taking money from other, higher priorities such as investigations into child pornography and drug-smuggling.
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