It’s often said that our elected officials in Washington DC have a way with words. Fiscal cliff, filibuster, earmarks and unanimous consent immediately come to mind.

Now they have come up with a word that’s destined for the Congressional linguistic obscurity hall of fame: “sequestration.”

Merriam-Webster’s dictionary defines it as “a legal writ authorizing a sheriff to take into custody the property of a defendant—or to take possession of property in a dispute to await the order of the court as to who is entitled.”

The word “sequester” itself is derived from the Latin sequestrare, meaning to “place in safekeeping.” Read more.

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Sequestration: What’s It All About?

Mon Feb 18, 2013

It’s often said that our elected officials in Washington DC have a way with words. Fiscal cliff, filibuster, earmarks and unanimous consent immediately come to mind.

Now they have come up with a word that’s destined for the Congressional linguistic obscurity hall of fame: “sequestration.”

Merriam-Webster’s dictionary defines it as “a legal writ authorizing a sheriff to take into custody the property of a defendant—or to take possession of property in a dispute to await the order of the court as to who is entitled.”

The word “sequester” itself is derived from the Latin sequestrare, meaning to “place in safekeeping.”

Sequestration first appeared in U.S. budgetary parlance in 1985, when senators and representatives decided that the U.S. Treasury should “sequester,” or withhold from  spending, any funds appropriated in excess of budget resolution spending limits. In other words, to cancel budget authority with automatic spending cuts as a way of forcing cuts in budget deficits.

The “S-word” resurfaced during negotiations that led to the 2011 Budget Control Act (BCA). Republicans and democrats unanimously recognized the need to reduce the government’s annual $1 trillion federal budget deficits (Washington borrows 30 cents of every dollar it spends—much of it from abroad, including from China). But they stalemated on a specific plan, with republicans generally opposing raising taxes and democrats generally opposing cutting spending.

The BCA created a special Congressional “super-committee” and charged it with responsibility to come up with a bipartisan plan for longer term deficit reduction. The 2011 law also provided that if the super-committee was unable to hammer out an agreement, a “sequestration” would take effect on January 2, 2013 and impose automatic federal spending cuts.

Specifically, the 2011 sequestration process calls for $1.2 trillion in spending cuts over a ten-year period, roughly $110 billion a year, with half coming from national defense spending and half from various domestic discretionary programs. Federal entitlement programs like Social Security, Medicare and Medicaid were exempted from sequestration.

Thus, federal programs like aid to education, farm subsidies, foreign aid, job training, the National Park Service, community development block grants to states, etc., would face sharp cuts in their funding—indeed much deeper proportionate cuts than if the entitlements had not been spared.

To the surprise of few, the super-committee was unable to reach an election year budget reduction compromise, so the sequestration clock began ticking.

As part of the New Year’s Day agreement to avert the so-called “fiscal cliff,” Congress and the President agreed to postpone sequestration until March 1. Thus, unless democrats and republicans can come up with a new deficit reduction plan over the next two weeks automatic, across-the-board cuts in federal government spending will take effect starting March 1, with the first $110 billion by September 30 of this year.

What makes this new round of fiscal crisis negotiations unique, however, is that if nothing is done sequestration will automatically take effect. In other words, the dreaded “S-word” of draconian spending cuts can be avoided only if some alternative budget reduction package proves acceptable to both republicans and democrats.

Spending cut advocates believe that the specter of sequestration gives them an edge in dealing with President Obama and Capitol Hill defenders of government programs. They can sit back and let sequester happen and $1.2 trillion worth of federal spending will be axed over ten years. To be sure, however, not even the staunchest advocate of slashing government spending is comfortable cutting $50 billion a year out of the defense budget, especially with U.S. troops still in harm’s way.

Worried that republicans would actually allow sequestration to take effect, Senate democrats last week unveiled legislation to substitute targeted cuts in specific programs, e.g., farm subsidies, and another round of tax hikes on high-income households.

Republicans, for their part, immediately declared that they would not even consider additional tax increases, having already been forced to accept $600 billion in higher taxes as part of the fiscal cliff negotiations January 1.

What’s the outlook? Congressional republicans believe they cannot afford to lose another deficit reduction battle to President Obama and Hill democrats. While the first year of sequestration would slash Pentagon spending by some $50 billion, a difficult proposition for the military, the total automatic deficit reduction package would come entirely from cutting government spending. In other words, no new taxes.

Expect a vigorous public relations campaign over the next two weeks. Democrats, the White House and their allies will warn of disastrous cuts in essential government programs if sequestration takes effect. Republicans and their allies will be equally adamant that federal budget deficits and the exploding public debt must be reduced, that taxes have already been raised and that excessive government spending is the main deficit driver.

Sequestration in the form of $1.2 trillion in automatic spending cuts over ten years is certainly not the ideal way to rein in out-of-control federal budget deficits and wasteful government spending. But lawmakers today have in some ways abdicated their responsibility to reach reasonable bipartisan compromises, with both sides chained to ideological orthodoxy. The last resort “S-word” may have become the default option.