In 2011, President Obama signed the Budget Control Act of 2011 (BCA). This bill allowed the President to increase the debt ceiling along with helping to reduce the deficit over 10 years. Included in the bill were two ways to cut the federal deficit 1.) Caps on discretionary spending or 2.) Create a Joint Select Committee on Deficit Reduction “Super Committee”. The first way is sequestration, basically a scare tactic or a deterrent, to get Congress to compromise on spending cuts. The second idea was for this newly formed Super Committee to do its job and produce a bill that would cut $1.2 trillion over 10 years – that did not happen.
Republicans and Democrats continue to not agree on how to shrink the deficit. Democrats and Obama want to close the loopholes for the wealthy – implement tax reforms. Obama also wants to include some additional spending reforms but in a way that will not further harm the economy. Republicans do not agree with closing such loopholes and would rather see deep spending cuts. Back in December, House Speaker John Bohner introduced “Plan B” which came about after initial talks with the White House broke down. The plan included the Spending Reduction Act of 2012, which barely squeaked by the U.S. House. In the end; however, a “Plan B” vote was scrapped after some within the Republican Party did not support it.
How does this affect Americans?
The cuts are evenly split between domestic and defense programs, although specific programs are exempted: Medicaid, Social Security, Supplemental Nutritional Assistance Program, essentially most mandatory programs. The Department of Defense will be impacted the most. The Pentagon already stated that if sequestration is implemented, furlough could take place – putting their civilian personnel on leave, one day a week, for 22 weeks. Travel will be affected because of less TSA agents, less border control agents and air traffic controllers. Job losses could amount to 2+ million jobs with more than 300,000 jobs due to defense cuts. Employers and employees are beginning to wonder what affect sequestration will have on them.
Time is not on Republicans’ and Democrats’ sides, and with one week remaining, lack of compromise continues as does the blame game.
Still do not understand, take a look at these infographics, The Washington Post found that explains the sequester.