2013 United States budget sequestration
However, the Congressional Budget Office estimated that the total federal outlays would continue to increase even with the sequester by an average of $238.6 billion per year[2]: 3 during the following decade, although at a somewhat lesser rate.
By a special provision in the BCA, Medicare spending rates were limited to no more than 2% per year versus the other, domestic percents planned for the sequester.
[1] Federal pay rates (including military) were unaffected but the sequestration did result in involuntary unpaid time off, also known as furloughs.
[8] On August 2, 2011, President Obama signed the Budget Control Act of 2011 as part of an agreement with Congress to resolve the debt-ceiling crisis.
This directed automatic across-the-board cuts (known as "sequestrations") to be split evenly between defense and domestic spending, beginning on January 2, 2013.
[14] The Republican House had narrowly passed[4][12] a bill on December 20, 2012,[15] which would have replaced only the defense side of the sequester with cuts to programs including food stamps, Dodd-Frank and the Patient Protection and Affordable Care Act.
[16] Nevertheless, many Republicans believed that the bill would serve as a template for what they wanted: no tax increases, no defense cuts, and considerable domestic spending reductions.
[12] On February 8, Democrat Chris Van Hollen, ranking member of the House Budget Committee, introduced new taxes and reduced spending to fend off the sequestration, including a Buffett-style tax-rule on millionaires, a repeal of some oil subsidy loopholes, a reduction in farm subsidy payments and an increase in flood insurance premiums.
[4][17] Patty Murray, Democratic Chairwoman of the Senate Budget Committee, proposed on February 14 to replace the 2013 sequester with $110 billion in spending cuts and tax increases.
Some public interest groups concerned about the federal budget wanted to stop the sequester, but few offered detail plans (beyond a "balanced approach") for replacing the automatic cuts.
CBO projected in February 2013 that under the sequester and Budget Control Act caps: Mandatory spending represents outlays to qualified program participants.
[1] CBO estimated in September 2011 that "most" Medicare spending would be reduced by approximately 2% per year versus planned levels, for total savings of $123 billion over the 2013-2022 period.
[1] This includes cuts to aid for Women, Infants, and Children (WIC) and the Low Income Home Energy Assistance Program.
[4] CBO estimated in September 2011 that interest would be reduced by approximately $170 billion over a decade if the sequester is implemented, due to relatively lower national debt levels compared to the previously planned path.
He wrote: "To address both the near- and longer-term [fiscal] issues, the Congress and the Administration should consider replacing the sharp, front-loaded spending cuts required by the sequestration with policies that reduce the federal deficit more gradually in the near term but more substantially in the longer run.
Such an approach could lessen the near-term fiscal headwinds facing the recovery while more effectively addressing the longer-term imbalances in the federal budget.
[37] A May 2014 report from the Government Accountability Office quantified the effects of the sequestration on federal employees and concluded that the Justice Department laid off one staff member as a result.
[39] The current Director of the National Institutes of Health (NIH), Francis S. Collins, said: "I worry desperately this means we will lose a generation of young scientists."
