As March 1 nears, Congress still appears to be nowhere close to solving the sequester, a budgetary situation that would result in mandatory spending cuts by the federal governent. If Republicans and Democrats cannot come to an agreement over budgetary matters, $85 billion in cuts to both the military and domestic programs will immediately go into effect.
The sequester was part of a deal reached during the debt-ceiling debates of 2011. Due to the parties’ disagreement on a deal to raise the debt-ceiling, they compromised on a stop gap measure, raising the debt-ceiling, but also agreeing to figure out a way to cut $1 trillion in domestic spending over the next 10 years under the Budget Control Act, according to the New York Times. A “Supercommittee” consisting of six members from each party were tasked with figuring out what form the $10 trillion in cuts would take.
However, because the “Supercommittee” was unable to agree on spending cuts by Dec. 23, 2011, no deal was reached, and nothing was proposed to Congress. As such, a clause in the Budget Control Act would have removed $85 billion in budget cuts on Jan. 1, 2013. “Together with the expiration of the Bush tax cuts and the payroll tax cut, this would have amounted to a giant fiscal contraction, almost certainly throwing the United States into another recession.” according to the Washington Post.
However, deals with the tax cuts were reached and the sequester was pushed back until March 1 of this year.
Currently, President Obama is fighting for an even split between domestic cuts and tax increases to replace the sequester cuts. Republicans have held steady against tax increases and proposed shifting the sequester cuts to programs such as food stamps and Medicare along with spreading them out over 10 years according to CBS News.
If a deal is not reached by March 1, effects will be felt within a month in the U.S., according to the Washington Post. In particular, people receiving unemployment benefits will see a likely 9.4 percent reduction in their check. The Department of Defense is expected to begin furloughing large quantities of their civilian task force due to the sequester. Payments to doctors and other medical professionals who treat Medicare patients will drop as well.