This question came up in one of my 2305s.
Hopefully this helps address the question
Facts related to the sequester: As a result of a compromise to increase the federal debt ceiling in 2011 (contained in the Budget Control Act of 2011) an agreement was made that if spending cuts cannot be agreed upon by Congress and the White House, then automatic cuts will be imposed. The idea was that the automatic cuts would be so bad a deal would be inevitable (click here for a look at the agreement at the time). A committee was put together to find a way to cut $1.2 trillion from the budget from 2013-2021, but it could not reach a deal, so the cuts were triggered. These cuts were originally set to happen this past January 2, but the deadline was extended until March 1 - a few days back.
As a result of the deal, $85 billion in spending has to be cut from the current budget. These are to be across the board, meaning that the cuts have to impact all affected agencies equally. Not all programs are affected. Mandatory programs - what we come to know as non-discretionary programs - like Medicaid and Social Security are exempted. Partly this is because they are set in law, and must be paid as a result, but partly because they are politically popular and no member of Congress dare touch them without risking upsetting the elderly. This includes some of the largest, and fastest growing, spending items on the national level - which leads some to question whether these cuts will do anything to address the deficit and debt, but let's leave that to another day.
Click here for a breakdown from the Bipartisan Policy Center. It describes how the current cuts, as maintained for the next 9 years, add up to $1.2 trillion in total cuts including the money saved in debt service.
Most of the cuts come from discretionary programs (click here for the Washington Post's look at the cuts). This spending is not set in law, so it can be changed very easily. These cuts are split between defense and domestic programs. The Post mentions that the defense cuts are likely to affect weapons purchasing, base operations, and construction work among other items. Federal News Radio says the cuts will affect operations and maintenance and include such things as "civilian worker pay and upkeep of facilities." I highly recommend looking at the previous links to get detail.
The National Journal also has a handy list of affected programs. They fall into four categories: defense discretionary spending, non-defense discretionary spending, Medicare, and non- defense mandatory spending.
The Office of Management and Budget released a report detailing the amount of money that will be cut from affected programs, but the actual programs that will be cut are not detailed. As best as I can tell, we still do not know exactly what specific programs will be cut. I'll fill in details as I find them. This is not unusual by the way. ACC is asked from time to time - and most recently last year - to prepare budgets to send to the governor's office that include decreases in spending. Last year we were asked to prepare a request that accounted for a 10% reduction in state funding. So the ball was in our court. I assume that is the same for the federal agencies affected by the sequester - but we'll find this out as time goes.
- Congressional Budget Office: The Budget and Economic Outlook: Fiscal years 2013-2023.
