In spring 2011, on a day when President Barack Obama and House Speaker John Boehner, R-Ohio, might otherwise be playing nine holes of golf, the nation's top two negotiators sat side by side in pressed business suits, stoic, executive boardroom-style. As Boehner ceremoniously dipped his tea bag into a delicate White House china cup, the nation's entire economic brain trust -- from Palo Alto to Boston -- sat on edge.
The president sat upright, poised -- poker-faced. House and Senate majority and minority party leaders posed awkwardly for the cable and network camera crews.
Two months later, after considerable wrangling and collapse of the bipartisan "grand bargain," a temporary deal was reached. Known officially as the Sequestration Transparency Act of 2012, the deal -- ironed out between the president, certain House and Senate Republicans and Democratic lawmakers -- called for across-the-board cuts to federal programs. The reductions are too numerous to list and too severe to swallow in a single gulp, with or without complimentary lumps of White House sugar.
Also known as H.R. 5872, the bill squeaked through the House and passed the Senate.
Thus entered into modern American vernacular the word sequestration. In simple parlance, the word means exactly what it implies: to sequester. In the language of multitrillion-dollar federal budgets, however, "sequestration" is a mouthful.
Sequestration is a legal term that requires the U.S. government to cut proportionate amounts from every named government agency's budget, including but not limited to defense and farm aid, education and social programs, highway, rail and other infrastructure projects, and countless other programs that feed private-sector contracts and provide well-paying jobs for hundreds of thousands of U.S. workers. Granted, some "protected" programs under the compromise law are exempt from the automatic cuts set to take effect on New Year's Day 2013 -- but not many.
More than 16 months after that historic but rather unproductive Saturday morning White House confab, the nation is once again at a budget impasse. This time, the cuts are real.
What was once an emerging story on the U.S. economy, with ramifications for huge mandatory cuts under the Sequestration Act, borders on a national crisis with global implications that could reverse the trend toward an economic recovery.
In this sense, the Sequestration Act is truly diverse, because the budget cuts will hurt America's poorest and richest constituencies equally and severely. Sequestration will hit the Beltway particularly hard, as it impacts defense contractors and subcontractors. In addition to Maryland and Virginia, states like Alabama, California, Florida, New Mexico, Ohio, Pennsylvania, Texas and Utah, which rely heavily on government defense spending, will be severely hit by automatic spending reductions come Jan. 1.
Further, the Sequestration Act includes automatic "triggers" set to reduce across-the-board spending for social programs in all 50 states, as well as education, health-care and infrastructure projects that traditionally help create private-sector jobs and stimulate the U.S. economy.
Although House Republicans have put forth efforts to postpone mandatory cuts under the Sequestration Act, the U.S. Congressional Budget Office reports that across-the-board reductions are presently set to occur on schedule.
Bottom line: If no budget is reached before Jan. 1, 2013, massive cuts will happen.
Sequestration Q&A: US Rep. Linda Sanchez
Sequestration Q&A: US Rep. Mario Diaz-Balart
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