The ISSUE

On March 1, 2013, $1.2 trillion in automatic federal spending cuts over 10 years began as mandated by the Budget Control Act of 2011. The cuts were originally scheduled to be implemented in January 2013, but were delayed for two months by the American Taxpayer Relief Act of 2012.

These cuts:

• Are split evenly between defense and non-defense spending.
• Exempt most programs intended to serve low-income. Americans and seniors, including Social Security.
  
• Medicare spending could be reduced by a maximum of 2%, with the cuts being made to payments to providers, rather than benefits to recipients.

Sequestration was designed as a enforcement mechanism set to be triggered if a bipartisan, joint select committee could not reach an agreement on at least $1.2 trillion in alternative deficit reduction.

LATEST NEWS

On March 1, 2013, President Obama issue an order cancelling $85 billion in spending from across the federal government as part of the initial cost-saving of sequestration.

In late February the White House has released state-by-state reports on the programmatic and practical impact of the automatic spending cuts.

Democratic and Republican leaders continue to promote different approaches for preventing and replacing the automatic spending cuts. Most Republican proposals have focused solely on additional, targeted spending cuts and entitlement reforms, while Democrats continue to advocate for sequestration replacement and deficit reduction that features both spending reductions and revenue components.

background Resources

The White House released a report September 14, 2012 on the potential impact of sequestration, concluding that the sequester would be “deeply destructive” to national security, domestic investments and core government functions. According to the report, the automatic cuts would reduce spending across more than 1,200 federal accounts starting on Jan. 2, 2013, trimming defense by $54.67 billion, domestic discretionary spending by $38 billion, Medicare by $11 billion and other mandatory spending programs by about $5 billion.

• Estimated Potential Impact of Sequestration on Selected Human Services Programs (National Human Services Assembly)