Budget "Sequestration" and Selected Program Exemptions and Special Rules
Karen Spar, Coordinator, Specialist in Domestic Social Policy and Division Research Coordinator
April 27, 2012
By Richard Kogan
Updated November 22, 2011
The debt limit deal enacted on August 2 calls for about $900 billion in cuts in discretionary programs over the next decade and would impose further automatic, across-the-board spending cuts in many programs if Congress fails to enact an additional $1.2 trillion in deficit-reduction measures by January 15, 2012. Those across-the-board cuts would first take effect in January 2013, a year later than many people have mistakenly believed, and would represent approximately a 9 percent annual cut in affected non-defense programs, along with roughly a 9 percent cut in defense programs in 2013. (Reports that the percentage cut would be significantly higher in defense than in affected non-defense programs also are mistaken.) This report outlines how the 2013 cuts would occur. Cuts would also occur in the next eight years, 2014-2021.
Sequestration was created under the Budget Control Act (BCA),1 the debt limit deal that was
passed by Congress in August 2011.
The BCA imposed caps on discretionary programs that will reduce federal spending by
about $1 trillion over the next ten years. Sequestration is in addition to the caps and will cut
another $1.2 trillion over the same period.
Sequestration was created as a back‐up plan to the "Super Committee." When the Super
Committee failed to reach an agreement, sequesters were automatically triggered.