Federal Relations

February 24, 2013

Sequestration Likely

Congress returns to work Monday after a week-long recess period. Foremost on their agenda this week will be the sequester, which is set to take effect on Friday unless Congress takes legislative action before then. Barring an extremely unlikely last-minute deal, about $85 billion is set to be cut from military, domestic, and some health-care programs beginning March 1st. Even if Congress decides to replace or delay some cuts during the late March debate on funding government for the remaining seven months of FY 2013, some cuts will certainly go into effect before then.

Sequestration involves trimming $85 billion from a $3.6 trillion annual federal budget, or about 2.4 percent. But the cuts will not affect Social Security or Medicaid, and the Medicare cuts total only about $11 billion in FY 2013. Thus, entitlement spending, which poses the biggest long-term challenge to the federal budget, accounts for only a sliver of the cuts. That leaves more than $70 billion in cuts to be applied over the next seven months to the roughly two-fifths of the budget that is devoted to discretionary spending, including research, education, the military, and dozens of other categories.