Captain Rick: Congress kicked America’s ‘debt can’ down the road for 60 days. Having done nothing since to address America’s monumental debt crisis, the Fiscal Cliff Sequester will take effect on March 1, 2013.
Congress could prevent the sequester from happening by agreeing on a better fix for America’s affixation for deficit spending beyond its means, but it’s not likely to do so before the deadline. In the mean time, the previously agreed sequester will automatically take effect on March 1…and rightly should. Those reading my earlier reports know that the sequester is only a tiny first step in fixing America’s gigantic thirst for spending money it does not have. Much more needs to be done.
What is the sequester and how will it affect America?
It’s just a fancy word for automatic, across-the-board cuts in funding as a result of a previous congressional agreement.
How much will be cut? The sequester would slash how much federal agencies are allowed to spend by $85 billion over seven months.
The White House estimates that funding for nondefense programs would be cut by 9%, while defense programs would be cut by 13%, for the seven months remaining in fiscal year 2013, which ends Sept. 30.
The funding reductions would come primarily from what’s known as discretionary spending.
Discretionary spending supports a vast array of programs, agencies and services from the FBI to the FDA to support for the Corporation for Public Broadcasting.
There would also be some cuts in mandatory spending, which unlike discretionary spending isn’t subject to annual review by Congress.
But popular entitlements such as Medicare and Social Security would be largely protected. So would safety-net programs such as Medicaid and food stamps.
Also exempt: military personnel and Veterans Affairs, although veterans may be hit in other ways, especially since they’re a big part of the Defense Department’s civilian workforce.
Indeed, the cuts on non-exempt areas will be broadly felt. Food inspections, border security, weather monitoring, medical research, disaster response, education programs and Meals on Wheels for seniors would be compromised.
Federal workers at different agencies would face furloughs. They may be told not to come to work one or two days every week or every pay period until September. And they won’t be paid for those furloughed days.
Anticipation of the sequester has already caused federal agencies to slow or freeze hiring and to limit the contracts they issue for future services and products. They’ve also reduced travel and training costs.
Is there a chance the sequester could be replaced?
Yes, increasingly policy observers expect Congress will at least try to replace it by March 27, although there are no guarantees. March 27 is the day funding for the government expires. To prevent a government shutdown on March 28, lawmakers must pass another funding bill — if not for the rest of the year, then at least for a few weeks or months.
The sequester was never intended to go into effect. The mere threat that it might was supposed to prod lawmakers to find a smarter, more gradual way to reduce deficits. But Democrats and Republicans still can’t agree on how, despite knowing this day would come for over a year.
House Republicans have proposed replacing the defense cuts with more nondefense reductions. Senate Democrats want to replace all the cuts with a mix of targeted spending cuts and tax increases. Each side rejects the other’s solution.
Imagine if your household budget was controlled by the U.S. Federal Government … You would be in serious financial trouble! https://atridim.wordpress.com/2013/02/18/imagine-if-your-household-budget-was-controlled-by-the-u-s-federal-government-you-would-be-in-serious-financial-trouble/