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What is Sequestration?

Definition of Federal Budget Term

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Federal Employees Protest Sequestration At Dep't Of Labor
Win McNamee/Getty Images News/Getty Images

Sequestration is a term used to describe the practice of using mandatory spending cuts in the federal budget if the cost of running the government exceeds either an arbitrary amount or the the gross revenue it brings during the fiscal year.

Simply put, sequestration is the employment of automatic, across-the-board spending cuts in the face of annual budget deficits.

Official Sequestration Definition

The Congressional Research Service defines sequestration this way:

"In general, sequestration entails the permanent cancellation of budgetary resources by a uniform percentage. Moreover, this uniform percentage reduction is applied to all programs, projects, and activities within a budget account.
However, the current sequestration procedures, as in previous iterations of such procedures, provide for exemptions and special rules. That is, certain programs and activities are exempt from sequestration, and certain other programs are governed by special rules regarding the application of a sequester.

Sequestration History

The idea of imposing automatic spending cuts in the federal budget was first put in place by the Balanced Budget and Emergency Deficit Control Act of 1985.

Sequestration is largely a deterrent, and a relatively successful one at that. "The prospect of sequestration has thus come to seem so catastrophic that Congress so far has been unwilling actually to let it happen," Auburn University political science professor Paul M. Johnson wrote.

Modern Examples of Sequestration

Sequestration was used in the Budget Control Act of 2011 to encourage Congress to reduce the annual deficit by $1.2 trillion by the end of 2012. If lawmakers failed to do so, the law would have triggered automatic budget cuts to the 2013 national security budget.

A super Congress made up of a select group of 12 members of both the U.S. House of Representatives and U.S. Senate was chosen in 2011 to identify ways to reduce the national debt by $1.2 trillion over 10 years. The super Congress failed to reach an agreement, however.

Opposition to Sequestration

Some lawmakers who initially championed sequestration as a method of reducing the deficit later expressed concern at the programs that faced spending cuts.

House Speaker John Boehner, for example, supported the terms of the Budget Control Act of 2011 but backtracked in 2012, saying the cuts represented a "serious threat to our national security and must be replaced."

Exemptions from Sequestration

Sequestration can also occur under the Pay As You Go Act of 2010, with some exceptions. Under that law the federal government must continue to pay out for Social Security, unemployment and veterans benefits, and the low-income entitlements such as Medicaid, food stamps and Supplemental Security Income.

Medicare, however, is subject to automatic cuts under sequestration. Its spending cannot be reduced by more than 2 percent, however.

Also exempt from sequestration are congressional salaries.

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