Sequester 2013 LIVE: Debt Crisis Freezes Washington With Inaction

We avoided the first fiscal cliff in December 2012 but are quickly stumbling towards another. On March 1, 2013, what's known as sequestration will go into effect: $85 billion will be cut from the federal budget, across-the-board.

There's plenty that can be done to avoid it. However, both Democrats and Republicans are posturing as if they're ready to let it happen. Whether it's a last minute negotiating tactic or a sign that that this is one cliff we're going over, we're down to the wire, yet again.

"If Congress allows this meat-cleaver approach to take place, it will jeopardize our military readiness. It will eviscerate job-creating investments in education and energy and medical research," Obama warned in a speech at the White House.

Budget sequestration is the latest flash point in the debate over government revenues and spending. In 2011, the Budget Control Act (BCA) was signed into law by President Obama, as part of an agreement over raising the debt ceiling. It binds Congress to producing a deficit reduction bill amounting to at least $1.2 trillion over 10 years, otherwise automatic cuts go into effect. The deadline was originally January 2, 2013 but a stop-gap measure was introduced that delayed it to March 1, 2013. Each party now has its own version of a final bill that could prevent sequestration, but aren't in agreement over the ratio of revenue increase to spending cuts.

"We have moved a bill in the House twice. We should not have to move a third bill before the Senate gets off their ass and begins to do something," House Speaker Boehner said, referring to the competing proposals.

The effects of the sequester would be significant and unpredictable. Because there would be a reduction in federal aid to states, each state would face it's own mini-crises, gradually, whether it's fewer resources for local Head Start programs or medical research. In addition, 800,000 Department of Defense employees (civilian) and Transportation and Security Administration agents could be furloughed. That's a small sampling of the sequester's effects.

Both parties are continuing to negotiate and play the blame game. Either the deadline will pass and the money spigot will slow to a trickle, or Congress could, conceivably, do what they did last time and essentially pass a bill that gives them more time to figure it out, or they could actually agree on a deficit reduction plan. What will happen? Stay tuned, and we'll bring you live updates as we count down to March 1.