What is sequester spending cuts

Statutory PAYGO sequestration has never occurred — when automatic reductions would have been triggered, Congress has always waived or delayed them from taking effect. When the Committee failed, backup procedures in the law created an enforcement mechanism of automatic cuts. On the discretionary side, starting in , the BCA put into place extremely tight spending caps through , with separate caps for defense and non-defense.

Instead, Congress passed legislation raising the caps four times: most recently in August, when the Bipartisan Budget Act BBA of raised the discretionary caps for and and suspended the debt limit for two years. The discretionary caps are enforceable through across-the-board cuts — also referred to as sequestration — if Congress enacts appropriations that exceed the caps.

For a table that compares the BCA austerity-level discretionary caps and the caps as modified by the Bipartisan Budget Acts of , , , and see the Appendix. On the mandatory side, the BCA required across-the-board cuts to non-exempt funding. Congress has extended the mandatory sequester several times. The required spending cuts in the BCA were intended to come half from defense programs and half from non-defense programs.

The defense category is the federal budget's national defense function, which includes the Department of Defense, nuclear-weapons related activities at the Department of Energy, and the national security activities of several other agencies such as the Coast Guard and Federal Bureau of Investigation.

Non-defense is everything else. Importantly, there is no additional flexibility on the mandatory side, where cuts to Medicare and other mandatory programs, which are already ongoing, continue unabated from FY So far, Congress has not used this additional flexibility. Importantly, the entire additional cut will take place on the defense side of the budget. What Happens to Discretionary Spend i ng After ?

Current law calls for the sequester caps to continue through August 13, August 15, February 25, April 2, Table of Contents. How Budget Sequestration Works.

The FY Sequester. What Caused Sequestration. Effects and Impact. Continuing Deficits. By Kimberly Amadeo. Learn about our editorial policies. Reviewed by Michael J Boyle. Article Reviewed May 31, Michael Boyle is an experienced financial professional with more than 10 years working with financial planning, derivatives, equities, fixed income, project management, and analytics.

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