News Column

'Sequestration' Part 2: Policymakers Q&A

Sept. 28, 2012

Staff -- HispanicBusiness

U.S. Rep. Raul Grijalva and Sen. Marco Rubio.
U.S. Rep. Raul Grijalva and Sen. Marco Rubio.

Two months after President Barack Obama, House Speaker John Boehner, R-Ohio, majority and minority party leaders gathered for a ceremonious White House boardroom-style meeting to iron out a bipartisan "grand bargain," a temporary budget deal was reached. Known officially as the Sequestration Transparency Act of 2012, the agreement called for across-the-board cuts to federal programs.

Also known as H.R. 5872, the bill squeaked through the House and passed the Senate.

Thus was entered into modern American vernacular the word sequestration. In simple parlance, the word means exactly what it implies: to sequester.

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 jobs for hundreds of thousands of U.S. workers. 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.

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: Sen. Marco Rubio

Sequestration Q&A: US Rep. Raul Grijalva

Sequestration Q&A: US Rep. Linda Sanchez

Sequestration Q&A: US Rep. Mario Diaz-Balart



Source: HispanicBusiness.com (c) 2012. All rights reserved.


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