From On The Money blog; The Hill; Erik Wesson, Jeremy Herb and Keith Laing:
“The White House has made the case it has almost no flexibility….
“But budget experts say some nuances within the law do give the administration some room to maneuver, though they acknowledge it is limited.
“For example, the administration has broad authority to define ‘program, project and activity,’ according to Barry Anderson, a former budget official under President George H. W. Bush. He said this would allow some flexibility in making cuts.
“OMB said Friday that it will be issuing the sequester order on the account level and agencies will determine the program, project and activity definition.”
The WSJ argued that the President has a lot of flexibility in its op-ed “The Sequester Revelation”:
“[T]he White House says it must now cut across the board regardless of how important a given PPA is.
“Not so fast. Programs, projects and activities are a technical category of the federal budget, but the sequester actually occurs at the roughly 1,200 broader units known as budget accounts. Some accounts are small, but others contain hundreds of PPAs and the larger accounts run to billions of dollars. For the Pentagon in particular, the distinction between PPAs and accounts is huge.”
The President’s hands may be tied, but we’re not going to see any burn marks from this sequester. If they wanted to send the Harry Truman to the Persian Gulf tonight, they certainly could.
Embattled Farmers 
So it starts. Now that the Republicans have made it clear that the sequester is here to stay and they know that its impacts will be unpopular with the public you can expect to hear every Republican talking head say that the President has the flexibility to chose what gets cut so that every time something is cut they will say the President did that to you. He could have chose to cut something else instead.
But the President does have more flexibility than the WH is admitting. There’s a lot of leeway in designating PPAs within budget accounts.
And I’m not sure how unpopular — broadly speaking — the cuts are going to be. They’re just not that big, and they leave many popular programs untouched.