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'Sequestration' New Term for Government Budget Battles
February 10, 2013

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The deal done by Democrats and Republicans to avoid America's going over the "fiscal cliff" resulted in a rise in taxes for some members of the economy but did not eliminate a series of spending cuts that will take effect on March 1 unless Congress acts again.

The term now being used to describe these spending cuts is "sequestration," a rather large word that means, basically, "seize and hold." If Congress does not pass a bill by the end of this month and the President does not sign that bill, the U.S. Treasury is under obligation to "sequester" a large amount of funds to help offset the Government's growing deficit. This "sequester" maneuver would take the form of spending cuts to the Department of Defense (13 percent) and to other government departments across the board (9 per cent combined), for a total of $1.2 trillion, to be secured during the next decade, starting on March 1.

The "sequestration" was put in place after negotiations between the two major political parties narrowly averted a government shutdown but resulted in little else in terms of long-term narrowing of the deficit, which has grown sharply in the last five years (up to $16 trillion), as the U.S. and the rest of the world grappled with the global financial crisis. Inclusion of cuts across several major government departments was designed to ensure that both political parties would be motivated to act in order to avert the legally mandated spending cuts.

The Defense Department is already planning to implement the cuts, by compiling lists of workers to "furlough," or lay off. Other high-profile targets for spending cuts include housing aid, national parks maintenance, and the budget for food inspections.

One option being discussed by several high-ranking Senators at the moment is a change of deadline, from March 1 to December 31, to give both parties time to more fully debate the issues. That option is similar to the one made to avert the "fiscal cliff": The January 1 deadline was moved to March 1.

Unlike many state and local governments, the Federal Government is not required to maintain a balanced budget.

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