SEQUESTRATION: A Term Once Foreign to Many Is Now the Name Du Jour in Washington, DC
(February 11, 2013) - In 2011, Congress was at an impasse on raising the debt ceiling. In a move that many members of Congress now regret, they approved the Budget Control Act of 2011 which granted authority to raise the ceiling as long as Congress could agree on a concomitant level of cuts. The task fell on a Super Committee - a 12-member panel - to recommend $1.2 trillion in budget cuts over the next ten years. If the Committee failed (which it did), the legislation would trigger sequestration, an across the board cut to virtually every discretionary federal program. Congress had until the end of 2012 to act.
Congress did act. But rather than reaching agreement on the full $1.2 trillion in cuts, they came up with a temporary agreement that staved off sequestration for another two months. The clock is ticking with judgment day set for March 1st. If Congress can't come to agreement on a deficit reduction plan, then sequestration will take effect and the results could cause major problems for Wall Street and Main Street.
Government agencies have been put on notice to develop plans for implementing the across the board cuts. This includes the Department of Homeland Security, the Federal Emergency Management Agency and the United States Fire Administration. Although the details of such plans are kept close to the chest, USFA is expected to take an eight percent cut if sequestration occurs.
With less than a month before the looming deadline, there is no sign that Congress and the Administration have reached any type of preliminary agreement to prevent the cuts. As we have become accustomed to witnessing, our elected leaders will most likely wait until the 11th hour to strike a deal - one that might kick the can further down the road or perhaps force them to strike some type of compromise.
Unfortunately, the term compromise has taken on a negative connotation in this town. There are few leaders willing to drive in the middle lane for fear of being broadsided by colleagues in either the left or right lanes. But compromise is imperative in order to resolve the fiscal problems that beset our nation.
The whole idea behind sequestration was to force Congress to address the debt. "We do dumb things in Congress. This sequestration idea is the dumbest thing," said Senator Lindsay Graham. But as he and other members have stated, Congress created sequestration and now they have to deal with it. Let's just hope that they will before the March 1st deadline forces indiscriminate cuts that will severely undermine the ability to protect our homeland.