I've postponed providing links to info on the sequester, but as we wade into the legislative and executive branches and are approaching a look at economic policy and the budgetary process, its time to look at it - plus, the cuts which had been extended a few weeks back are set to start happening very soon.
For definitional purposes - when used as a noun "sequester" means "a general cut in government spending."
Click here and here for general background. The story begins in 2011 when some in Congress began expressing concern over the large deficits that began following the crash in 2008. Conflict emerged between those who wanted to deal with the deficit immediately (and then debated among themselves about whether this is best done by cutting spending or raising taxes) and those who believed that the cuts were premature and should be delayed until after the economy stabilized. Supporters of immediate spending cuts threatened to not raise the debt ceiling - among other demands - unless the cuts were made. This conflict ultimately led to the US's credit rating being downgraded by one of the agencies that does this sort of thing. The debt ceiling was ultimately raised in the Budget Control Act which established a committee that would develop a proposal for dealing with the deficit, and established that in the event that the committee could not do so - or the committee's proposal was not adopted, across the board cuts would be made to the federal budget. This is the sequester. Since the committee's proposals were not adopted - the cuts are now set to be made. That is what is going to occur on March 1st. So this is the culmination (unless an extension is made) of a process going back almost two years.
Hopefully this is an adequate summary. Here are random stories dealing with the economics and politics of the current dispute.
- Here is National Journal's look at the politics of the deficit battle.
- This Washington Post article links to four separate studies that point out where the cuts will fall and how many jobs are likely to be lost due to them. They pick up over time and affect mostly discretionary spending. Texas stands to lose a significant amount if defense spending in the state is cut.
- The two men responsible for creating the original deficit reduction proposal have released a second version.
- Politico reports that members of Congress - of both parties - are working to ensure that whatever cuts happen do not happen in their districts. This points out one of the major problems associated with cutting spending. It is not an abstract exercise. At some point the cuts impact real people and real programs. This provides political support to stop the cuts - which makes deficit reduction just that more difficult.
- The NYT explains how the cuts are likely to happen. They won't all be at once, so they won't all be felt immediately.
- A conservative Republican is concerned that excessive focus on spending cuts right now will hamper economic growth, and that the best way to deal with the deficit is to focus primarily on growing the economy.
- In a twist, here's an argument that the economy is improving - albeit slowly - and the deficit is shrinking. So there is no need to worry excesively about the debt. The primary economic problem is "long-term unemployment, stagnant wages, [and] a slow-to-recover housing sector," not the deficit. Fix those first and the deficit fixes itself.
Expect more as the deadline approaches.
