5 key facts about sequestration
Fact #1 Sequestration refers to the automatic across-the-board cuts to federal discretionary spending mandated by the Budget Control Act of 2011. If enacted, sequestration will impose $1 trillion in cuts, which will be split 50/50 between defense and non-defense discretionary spending programs.
By law, sequestration will not allow the executive branch to choose “which programs to exempt or what percentage cuts to apply” with the exception of military personnel accounts, according to the Office of Management and Budget. The OMB has described sequestration as a “blunt and indiscriminate instrument” to cut federal spending and reduce the deficit.
Sequestration will be triggered if Congress fails to come up with $1.2 trillion in spending cuts by Dec. 31, 2012. [UPDATED Jan. 3, 2013 – The American Taxpayer Relief Act of 2012 delayed the sequestration deadline until March 1, 2013.]
The bipartisan Joint Select Committee on Deficit Reduction – known colloquially as the “Super Committee” – was formed last year to expedite the negotiation of a deficit reduction plan; however, the Super Committee was unable to compromise and present a package for Congress to vote on.
Fact #2 More than 174 House Republicans and 27 Senate Republicans voted in favor of sequestration in August 2011. However, many GOP lawmakers – including Republican vice presidential nominee Paul Ryan who voted for sequestration – are now trying to undo the potential sequester cuts to defense discretionary spending.
Circumventing sequestration without passing a $1.2 trillion deficit reduction package would be “disastrous,” warned Erskine Bowles, Co-Chair of the National Commission on Fiscal Responsibility and Reform.
“I think people would look at this country and say, ‘You guys can’t govern,’” said Bowles. “I think people would look at it and say, ‘You know what? They’re really not going to stand up to their long-term fiscal problems. This is not going to be a powerful country in the future.’ And they would think we were well on our way of becoming a second-rate power.”
The sequester cuts were included in the Budget Control Act as part of a bipartisan compromise to raise the debt ceiling, which was needed to prevent the U.S. government from defaulting on its debt obligations.
Although increasing the debt limit has traditionally been a non-controversial procedure in Congress, Republican lawmakers held the vote hostage last summer to exact $2.2 trillion in spending cuts – roughly the same amount as the debt limit increase.
The first round of $1 trillion discretionary spending cuts went into effect in 2011. Sequestration will automatically enforce a second round of steep cuts to discretionary spending, which makes up just 37% of total federal spending in 2011, should Congress fail to pass a $1.2 trillion deficit reduction package by Dec. 31, 2012.
Fact #3 The sequester cuts were designed to be painful for both Republicans and Democrats to compel both sides to compromise on a $1.2 trillion deficit reduction package.
“The specter of harmful across-the-board cuts to defense and non-defense programs was intended to drive both sides to compromise. The sequestration itself was never intended to be implemented,” according to Office of Management and Budget. “The Administration strongly believes that sequestration is bad policy, and that Congress can and should take action to avoid it by passing a comprehensive and balanced deficit reduction package.”
Fact #4 Sequestration is not inevitable. Congress still has until Dec. 31, 2012 to pass a $1.2 trillion deficit reduction package to prevent sequester cuts from taking effect in 2013. The task will likely fall on the lame duck Congress since bipartisan compromise is highly improbable before the November election.
Fact #5 If allowed to proceed, sequestration will cut defense discretionary spending by 9.4%, non-defense discretionary programs by 8.2%, and Medicare funding by 2% over the next 10 years, according to the Office of Management and Budget.
Defense, which accounts for 52% of the total discretionary budget, will see a total of $492 billion in cuts, averaging about $54.67 billion per year.
Non-defense discretionary programs, which make up 47% of the total discretionary budget, will also be subjected to $492 billion in reductions of which roughly $100 billion will come from Medicare cuts. Yearly non-discretionary spending cuts will average about $43.6 billion plus another $11.1 billion in Medicare cuts. Non-defense discretionary spending funds highway and transportation infrastructure, veterans’ benefits, public safety, public health, education, federal student aid, job training, and food assistance for the poor.
“Sequestration would be deeply destructive to national security, domestic investments, and core government functions,” according to the OMB. “No amount of planning can mitigate the significant impact of the sequestration. The destructive across-the-board cuts required by the sequestration are not a substitute for a responsible deficit reduction plan.”
- Office of Management and Budget (OMB): OMB report pursuant to the Sequestration Transparency Act of 2012 – Sept. 14, 2012 (PDF)
- WhatTheFolly.com: List of 174 House Republicans who voted for sequestration
- WhatTheFolly.com: List of 27 Senate Republicans who voted for sequestration
- Republican National Committee: 2012 Republican platform (PDF)
- WhatTheFolly.com: Transcript: Sen. Patty Murray challenges Republicans on ‘balanced approach’ to avoid fiscal cliff
- WhatTheFolly.com: Discretionary spending will face another round of cuts if the Super Committee’s plan fails
- WhatTheFolly.com: Infographic: Where did the federal tax dollars go in 2011?
- WhatTheFolly.com: Infographic: Breakdown of federal discretionary spending
- WhatTheFolly.com: Why the Super Committee failed
- WhatTheFolly.com: U.S. debt ceiling timeline 2011
- WhatTheFolly.com: U.S. debt limit: facts vs. myths
- WhatTheFolly.com: Obama signs debt limit bill, ending U.S. default crisis
- WhatTheFolly.com: Debt limit increase passes Senate; Democrats shift focus to jobs
- WhatTheFolly.com: House approves debt ceiling compromise 269-161; Senate schedules vote Tuesday
- WhatTheFolly.com: Obama asks Congress to compromise on debt limit to avoid default
- WhatTheFolly.com: Commentary: Will Republicans set aside their political agenda and do what’s right for America?
- WhatTheFolly.com: Reid scolds Republicans for walking out on debt limit talks & refusing to address taxes
- WhatTheFolly.com: Sen. Mitch McConnell proposes a “last choice option” to raise the debt limit
- WhatTheFolly.com: Boehner says the debt limit is Obama’s problem
- WhatTheFolly.com: Boehner to Democrats on debt limit: It’s the GOP’s way or the highway
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