Sequestration explained in five basic questions and answers

In 2011, less than a year after failing to adopt recommendations from the bipartisan Simpson-Bowles commission, the United States reached its legal budgetary debt ceiling. President Obama, believing our still-recovering economy could ill afford the significant spending cuts needed to bring the debt down, petitioned House Speaker John Boehner (R-OH) and Congress to raise the limit of the debt ceiling.A deal was struck (the Budget Control Act of 2011) between Congress and the President that raised the debt ceiling and, among other things, created sequestration as an incentive for future bipartisan cooperation over long-term fiscal reform.Sequestration cuts are “across the board,” meaning they impact every area of government spending with the exception of Social Security, Medicare, and ongoing wars. Politicians cannot protect or abolish any specific program or government agency. The sequestration cuts impact defense and domestic discretionary spending equally.More than $500 billion would be removed from the budgets of the Department of Defense and our national security agencies. The broad indiscriminate cuts of sequestration would arguably weaken America's national defense.The balance of cuts would come from non-defense programs. The White House has released a “fact sheet” detailing some of the specific discretionary programs that would be impacted, including disaster relief, small business support, education, health care, law enforcement, aid to low-income women and children, national parks and on and on.In current political parlance, sequestration refers to the $1.2 trillion in automatic mandatory spending cuts that are intended to close the gap between U.S. government spending and the federal budget.The cuts take place over ten years and they are scheduled to start on March 1, 2013. The first $85 billion in spending cuts would take effect this year.View the list »
President Obama, VP Biden, and Congressional leaders attending the POTUS' swearing in ceremony.

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Understanding the impact of last fall’s fiscal cliff might not have been easy, but at least the term conjured up images to which Americans could relate. Having avoided the fiscal cliff a few weeks ago, we now face sequestration, our next major financial crisis.

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Unlike "fiscal cliff," the word "sequestration" evokes no mental picture for most people, and the term provides little insight into the magnitude of the concept.

In the wake of the President’s State of the Union address, there is no time like the present for a quick primer on sequestration and its potentially enormous impact.

I have composed a list of five basic questions about sequestration and provided the answers to each, in an effort to shed some light on what’s at stake.

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  • In current political parlance, sequestration refers to the $1.2 trillion in automatic mandatory spending cuts that are intended to close the gap between U.S. government spending and the federal budget.The cuts take place over ten years and they are scheduled to start on March 1, 2013. The first $85 billion in spending cuts would take effect this year.
  • Sequestration cuts are “across the board,” meaning they impact every area of government spending with the exception of Social Security, Medicare, and ongoing wars. Politicians cannot protect or abolish any specific program or government agency. The sequestration cuts impact defense and domestic discretionary spending equally.More than $500 billion would be removed from the budgets of the Department of Defense and our national security agencies. The broad indiscriminate cuts of sequestration would arguably weaken America's national defense.The balance of cuts would come from non-defense programs. The White House has released a “fact sheet” detailing some of the specific discretionary programs that would be impacted, including disaster relief, small business support, education, health care, law enforcement, aid to low-income women and children, national parks and on and on.
  • In 2011, less than a year after failing to adopt recommendations from the bipartisan Simpson-Bowles commission, the United States reached its legal budgetary debt ceiling. President Obama, believing our still-recovering economy could ill afford the significant spending cuts needed to bring the debt down, petitioned House Speaker John Boehner (R-OH) and Congress to raise the limit of the debt ceiling.A deal was struck (the Budget Control Act of 2011) between Congress and the President that raised the debt ceiling and, among other things, created sequestration as an incentive for future bipartisan cooperation over long-term fiscal reform.
  • In addition to mass government layoffs (including 1,000 FBI agents) and compromised essential services, harsh sequestration cuts could also derail the U.S. economy.The White House warns that economic improvements in unemployment, the housing market, the Dow Jones index, and consumer spending could be brought to a halt, or worse sent into a tailspin.
  • There is no chance Republicans and Democrats will produce a longer-term budget agreement that both sides can accept in the next two weeks. Consequently, the President has asked Congress to approve a short-term budget measure that would postpone the mandated budget cuts for several more months. Not an ideal answer, but a solution nonetheless. (Yes, I am tired of stopgap measures too, but this time there is too much at stake not to accept the temporary fix.)House Republicans can choose to pass the legislation President Obama has requested, amending his proposal as they see fit, or they can roll the dice and let the sequestration cuts commence.Congress has earned its pathetic single-digit approval rating, and if our elected representatives allow the sequester cuts to kick in, they may not have far to fall. Sadly, the rest of us do. If no agreement is reached and the mandated budget cuts go into effect, Americans across the financial spectrum will pay a huge price for the incompetence we have allowed to fester in the Capitol building on both sides of the aisle.
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, SF Political Buzz Examiner

Jeff McKown is a freelance writer based in Salinas, CA, with an education in International Studies and 20+ years of business leadership experience. Jeff's articles on politics and culture can be be found on Yahoo, Patch, and on his blog, The Way Things Turn. Email Jeff at jeffmckown@comcast.net.

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