The Sequester: What it is and why it is

DAYTON, Ohio (WDTN) — In 2011, the Budget Control Act (BCA) established a 12 member Joint Select Committee on Deficit Reduction charged with reducing the deficit by an additional $1.2 - $1.5 trillion over ten years. The BCA also included a sequestration clause should the committee fail. 

In the end, the committee did fail in their task, and on Nov. 21, 2011, the members of the bipartisan committee stated "we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee's deadline."

That admission of the committee’s failure to reach an agreement is what triggered sequestration - automatic cuts for each of nine fiscal years 2013-2021, totaling $1.2 trillion.

Without Congressional action to prevent sequestration, the first round of cuts were scheduled to take place Jan. 2, 2013, the date that became known as the 'fiscal cliff.' On Dec, 31, 2012, up against a trillion dollar deadline, the Senate passed legislation, followed by House of Representatives, delaying the automatic cuts and stopping short of the sequester.

Go to practically any website that produces news content, tune into CNN, FOX News, MSNBC, network news, or pick up a newspaper and the words sequester and sequestration are now bantered about as if it is an everyday component of one’s everyday vocabulary. 

What is the sequester and sequestration?

As commonly heard in today’s reporting, as it pertains to federal budgets and the appropriation of funds, the Glossary of Political Economy Terms defines sequestration:

“If the dozen or so appropriation bills passed separately by Congress provide for total government spending in excess of the limits Congress earlier laid down for itself in the annual Budget Resolution, and if Congress cannot agree on ways to cut back the total (or does not pass a new, higher Budget Resolution), then an "automatic" form of spending cutback takes place. This automatic spending cut is what is called ‘sequestration."

The sequester, avoided once, looms again, with the deadline set for March 1. The 2013 cuts apply to "discretionary" spending and are divided between reductions $500 billion to defense and $700 billion to non defense.

For the Pentagon, in 2013 alone, some $46 billion in reduced spending would result in "a serious disruption in defense programs and a sharp decline in our military readiness," outgoing Defense Secretary Leon Panetta said in a Feb. 6 address at Georgetown University.

Panetta predicts as many as 46,000 defense department jobs would be at risk and as many as 800,000 civilian workers could be furloughed for up to 22 days.

It will mean cuts to Army training and maintenance; decreased naval operation; and for the Air Force, reduced flying hours and weapons systems maintenance.

In Ohio, and specifically the Dayton area, those numbers cause significant concern because of the presence of Wright-Patterson Air Force Base (WPAFB) and its economic impact.

A U.S. Air Force document predicts sequestration will take more than $111 million from Ohio's economy in lost wages alone during the first six months after it is implemented,  The Dayton Business Journal cited in its Feb. 12 online edition.

More than 14,000 workers in Ohio would be affected by sequestration forced furloughs. As many as 13,000 of those employees would be from the Dayton region.

According to the Business Journal article, the planning for sequestration is already having a ripple effect outside the gates of WPAFB - construction companies that perform work at the base have put $2.7 million in construction projects on hold.

What are non-defense discretionary programs?

Discretionary programs differ from “entitlement” programs such as Social Security, Medicare, and Medicaid, that are funded automatically to meet the needs of all who qualify for them. Discretionary programs are those that Congress funds annually through the appropriations process.

Programs that could be affected by sequestration include medical and scientific research; education and job training; infrastructure; public safety and law enforcement; public health; weather monitoring and environmental protection; natural and cultural resources; and housing and social services.

The sequester will affect an automatic 8.4 percent cut to program funding levels in 2013 for most  non-defense discretionary programs. These cuts will be across-the-board, with no departmental or agency control on how the sequester impacts individual programs.

The sequester, a bipartisan plan put in place in 2011 to guarantee the resolution of a budget impasse, has in 2013 become a partisan battle of enormous economic proportions and consequence.

In his Feb.  State of the Union address , President Barack Obama warned of the consequences of letting the sequester happen, and called for a “balanced” combination of new revenues and spending cuts to stave off impending cuts.

“Most Americans – Democrats, Republicans, and Independents – understand that we can’t just cut our way to prosperity.  They know that broad-based economic growth requires a balanced approach to deficit reduction, with spending cuts and revenue, and with everybody doing their fair share.,” Obama said.

On the other side  of the aisle, John Makin a resident scholar at the American Enterprise Institute, writing recently in the Wall Street Journal, urged Congress to embrace the sequester and allow it to take effect, arguing the modest - by U.S. budgetary standards - 10-year spending cut of up to $1.5 trillion translates into $2 of spending cuts for every dollar of the president's tax increases enacted on Jan. 2 .

How will this play out, on or before the March 1 deadline? Though both Democrats and Republicans were at the table when the deal was struck in 2011 that put the country on the path to sequestration, both sides now blame the other for the inability to strike a final sequester stopping budget compromise.

“The Republicans are poised to shut down government, the Republicans are poised to let sequestration go forward, which translates to unemployment. No jobs, it takes us into a recession,” Minority Leader Nancy Pelosi  said .

House Speaker John Boehner blames the president.

“Let me make clear: I don’t like the sequester,” Speaker Boehner said at a recent Capitol Hill news conference.“ I think it’s taking a meat ax to our government, a meat ax to many programs and it will weaken our national defense. That’s why I fought to not have the sequester in the first place. But the president didn’t want to have to deal with the debt limit again before his re-election.”

The sequester, in the words of Secretary Panetta, is "legislative madness."  At that Georgetown University talk, he likened it to a movie scene written by Mel  Brooks.  

"For those of you who have ever seen ' Blazing Saddles ,' it is the scene of the sheriff putting the gun to his head in order to establish law and order," Panetta said "That is sequestration."

Copyright 2014 WDTN TV. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

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