An Overview of Sequestration and the Federal Budget

Use of Automatic Across-the-Board Spending Cuts

Federal Employees Protest Sequestration At Dep't Of Labor
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The term sequestration is used to define mandatory spending cuts in the federal budget. Sequestration is a mechanism used when the cost of running the government exceeds either an arbitrary amount or the the gross revenue it brings during the fiscal year. There have been numerous examples of sequestration in American history.

Simply put, sequestration is the employment of automatic, across-the-board spending cuts to reduce annual budget deficits. The most recent sequester was put in place by Congress in the 2011 Budget Control Act and took effect in 2013. The sequester of 2013 cut $1.2 trillion in spending over nine years.

Sequestration Definition

The Congressional Research Service defines sequestration this way:

"In general, sequestration entails the permanent cancellation of budgetary resources by a uniform percentage. Moreover, this uniform percentage reduction is applied to all programs, projects, and activities within a budget account. However, the current sequestration procedures, as in previous iterations of such procedures, provide for exemptions and special rules. That is, certain programs and activities are exempt from sequestration, and certain other programs are governed by special rules regarding the application of a sequester.

Sequestration History

The idea of imposing automatic spending cuts in the federal budget was first put in place by the Balanced Budget and Emergency Deficit Control Act of 1985.

A sequester is largely a deterrent, and a relatively successful one at that. "The prospect of sequestration has thus come to seem so catastrophic that Congress so far has been unwilling actually to let it happen," Auburn University political science professor Paul M. Johnson wrote.

Modern Examples of Sequestration

The most recent sequester was used in the Budget Control Act of 2011 to encourage Congress to reduce the annual deficit by $1.2 trillion by the end of 2012. When lawmakers failed to do so, the law triggered automatic budget cuts to the 2013 national security budget.

A super Congress made up of a select group of 12 members of both the U.S. House of Representatives and U.S. Senate was chosen in 2011 to identify ways to reduce the national debt by $1.2 trillion over 10 years. The super Congress failed to reach an agreement, however.

Opposition to Sequestration

Some lawmakers who initially championed use of the sequester as a method of reducing the deficit later expressed concern at the programs that faced spending cuts.

House Speaker John Boehner, for example, supported the terms of the Budget Control Act of 2011 but backtracked in 2012, saying the cuts represented a "serious threat to our national security and must be replaced."

President Barack Obama also voices concern about sequestration on American workers and the economy. "Harmful automatic budget cuts — known as the sequester — threaten hundreds of thousands of jobs, and cut vital services for children, seniors, people with mental illness and our men and women in uniform," Obama said. "These cuts will make it harder to grow our economy and create jobs by affecting our ability to invest in important priorities like education, research and innovation, public safety, and military readiness."

Exemptions from Sequestration

Sequestration can also occur under the Pay As You Go Act of 2010, with some exceptions. Under that law the federal government must continue to pay out for Social Security, unemployment and veterans benefits, and the low-income entitlements such as Medicaid, food stamps and Supplemental Security Income.

Medicare, however, is subject to automatic cuts under sequestration. Its spending cannot be reduced by more than 2 percent, however.

Also exempt from sequestration are congressional salaries.