What is Sequestration?

“Sequestration” is a process of automatic, largely across-the-board spending reductions under which budgetary resources are permanently canceled to enforce certain budget policy goals. It was first authorized by the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA, Title II of P.L. 99-177, commonly known as the Gramm-Rudman-Hollings Act).

Two provisions were included in the BCA that could result in automatic sequestration:

• Establishment of discretionary spending limits, or caps, for each of FY2012-FY2021. If Congress appropriates more than allowed under these limits in any given year, sequestration would cancel the excess amount.

• Failure of Congress to enact legislation developed by a Joint Select Committee on Deficit Reduction, by January 15, 2012, to reduce the deficit by at least $1.2 trillion. The BCA provided that such failure would trigger a series of automatic spending reductions, including sequestration of mandatory spending in each of FY2013-FY2021, a one-year sequestration of discretionary spending for FY2013, and lower discretionary spending limits for each of FY2014-FY2021.

In fact, the Joint Committee did not develop the necessary legislation and Congress did not meet the January 15, 2012, deadline. Thus, automatic spending cuts under the BCA were triggered, with the first originally scheduled to occur on January 2, 2013. Legislation was enacted on January 2, however, that delayed the effective date until March 1, 2013 (P.L. 112-240).

Under the Statutory PAYGO Act, sequestration is part of a budget enforcement mechanism that is intended to prevent enactment of mandatory spending and revenue legislation that would increase the federal deficit. This act requires the Office of Management and Budget (OMB) to track costs and savings associated with enacted legislation and to determine at the end of each congressional session if net total costs exceed net total savings. If so, a sequestration will be triggered.

Read the full report from the Congressional Research Service here.

How Will Sequester Cuts Impact Louisiana?

If sequestration were to take effect, some examples of Louisiana programs and resources that would be affected this year include:

• Teachers and Schools
• Work-Study Jobs
• Head Start
• Protections for Clean Air and Clean Water
• Military Readiness
• Law Enforcement and Public Safety Funds
• Job Search Assistance
• Child Care
• Vaccines for Children
• Public Health
• STOP Violence Against Women Program
• Nutrition Assistance for Seniors

Read the full report of nationwide and Louisiana-specific sequester impacts here.

By The Numbers: The President has already approved more than $2.5 Trillion in deficit reduction, with another $1.5 Trillion still on the table for discussion, including:

• $200 Billion in an even split between defense and nondefense spending
• $400 Billion in health-related savings
• $200 Billion in non-health mandatory savings
• $580 Billion in closed tax loopholes with a deduction cap of 28% for the wealthy

Read the Whitehouse published table with additional detail and specifics here.

VISUALIZE THE ISSUE:

Civilian Agency Cuts

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Department of Defense Cuts

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