If the "fiscal cliff" wasn't enough Washington D.C.-made drama for Americans and the international community at the end of 2012, politicians in D.C. are at it again. The next battle in this soap opera-like reality TV series turns attention to the March 1 deadline for the sequester, a series of across-the-board federal spending cuts to domestic and defense programs.
The $1.2 trillion package is the latest in a series of deadlines that politicians in D.C. have self-imposed in an effort to bring about action and accountability to reduce the federal debt. In August 2011, Republicans refused to raise the debt ceiling, which is the government's borrowing limit, unless there was a plan to reduce the debt. As an end to growing partisanship and political gridlock, Congress and President Obama finally signed the Budget Control Act (BCA) into law, approving $2.4 trillion in additional borrowing ability. The trade-off was a similar amount of dollars in deficit reduction over 10 years, with $900 million from spending caps and the remaining $1.2 trillion determined by the bipartisan Joint Committee on Deficit Reduction.
Part of the BCA ensured some form of consequence if the bipartisan committee failed to come to an agreement to reduce government spending. Sequestration, or $1.2 trillion in across-the-board spending cuts to domestic and defense programs, would take effect on January 2, 2013 if no agreement were made. According to the Office of Management and Budget, "the sequestration itself was never intended to be implemented," but rather was meant to "force Congress to act on further deficit reduction [and] drive both sides to compromise." Clearly that has not yet been the case as partisanship is alive and well in D.C. on the topic of spending cuts and sequestration.
However, Congress was able to extend the timeline until the sequester goes into effect, pushing back the deadline from January 2, 2013 to March 1, 2013 as part of the "fiscal cliff" negotiations. In a way, rather than deal with the self-imposed January 2 deadline, politicians and lawmakers deferred any need to make a decision. And now, just days away from the impending sequester that politicians never thought would actually happen, the odds of a bipartisan deal are looking less likely. Senator Tom Coburn (R-Okla.) said sequestration would happen as a way to have both sides feel the pain that will motivate them to make tough choices.
It's important to keep in mind what lies ahead. Only 26 days after the sequester takes effect, the government runs out of money. This less-than-a-month period could serve as a "trial sequester" of sorts for GOP Congress members to take some action to fix the negative impacts of the sequester. In the meantime, President Obama and the White House kicked off a weeklong campaign outlining the impact of sequestration on all 50 states in an effort to pressure congressional Republicans to make a deal. Although it will not really have a large impact on the bottom-line of the federal debt, the impacts of the sequester are far-reaching.
If your college basketball team will not be in the big dance in March (or even if they will be), don't worry … politicians and lawmakers in D.C. are creating a whole new meaning for March Madness.