USDOT and other federal agencies should spend money as if automatic budget cuts scheduled for January 2 won’t happen. The White House issued the order last Friday, and apparently has faith that Congress will act to avoid the cuts.
The directive came in a routine message that the Office of Management and Budget (OMB) sends out when agencies are operating under a short term funding legislation. Congress enacted a six-month funding bill, but is anticipated to pass a final 2013 bill in the lame duck session or early 2013. OMB will almost certainly amend the guidance if Congress does not resolve the automatic budget cuts issue by the end of the year.
If Congress does not act, nearly $2 billion could be cut from the 2013 budget for transportation-related programs.
Obviously, if USDOT distributes funding as if the automatic budgets cuts won’t happen, and then the cuts occur, the entire cut will be applied to the remaining months.
Source: OMB Directs Federal Agencies to Ignore Sequester for Now, Congressional Quarterly