Way back in August 2011, the US Congress established what was referred to as the "Supercommittee", a bipartisan Congressional jointcommittee that would try and hammer out a deficit reduction plan, as part of the Budget Control Act of 2011 recommended by the presidential Simpson-Bowles Committee. One part of the Budget Control Act that was added in was automatic cuts that would take effect if a deficit reduction plan was not reached. Most of those spending cuts would target discretionary spending, like education, defense, regulatory agencies, etc.- cuts to medicare and social security were restricted to 2% or somewhere around that.
The prospect of these cuts were supposed to encourage a bipartisan solution for deficit reduction and long-term debt reduction. The supercommittee was unable to create a plan and was formally terminated in January of 2012. From that point forward as the US edged nearer to elections, there was no progress on a plan.
These automatic cuts, referred to as budget sequestration, were supposed to take effect on January 1st, 2013. Some of you may recall the hubub around that as we neared New Years. An 11th hour deal in Congress averted that with the "American Taxpayer Relief Act", but only moved the deadline to March 1st as it had only resolved some debt ceiling issues.
The sequester totals at about $85 billion. While this is a small figure compared to the current deficit of about $1.1 trillion, the cuts are done quickly rather than over a timetable. As such certain operations dependent on government funding might be adversely affected.
This deadlock has consumed much of the past month. The White House has suggested an alternate plan that would be part revenue raising (including through tax loopholes that was suggested in the previous debate) and part spending cuts. The White House has argued that the cuts would be detremental at this stage in the economy, and this has been echoed by Congressional Democrats.
Congressional Republicans have been opposed to the White House plans, though for different reasons. A larger block of Republicans recognize the potential fallout from the cuts but oppose the president's plans for revenue creation, as they said they had already compromised on that back in the January debates. A smaller group of more tea party-aligned Republicans see that the cuts are desirable and infact want an alternative deal that would cut a larger amount out of the budget.
The deadline is March 1st for something to be hammered out, but I'm not sure if something like with the January deal can be reached. It doesn't seem possible at this point to delay the cuts like they did last time, and the current situation requires a resolution to this. To create a more complete plan in this short span might be unreachable, at least it's what I think.
We are now on the other side of the sequester. As no agreement was reached (again, many expected the sequester to happen), the cuts will begin to roll out. A big flag that this was not going to happen was when Obama scheduled a meeting with Congressional leaders, including Speaker Boehner, which has just ended.
Basically, the same impasse. The White House is suggesting a long term plan that would be a combination of revenue creation and spending cuts, while Boehner is staking out the position that there can be no additional revenue, only spending cuts.
I wish these cuts included the salaries of elected officials. They should have skin in the game. I read stuff won't actually happen until tomorrow since it's up to Obama what time he actually wants to start the cuts, meaning he could wait until midnight if he wanted. Also, how set in stone are these? Can they just reverse them in a few days if they feel like it?
$85 billion doesn't really sound like that much considering that the US has been adding about 1000 billion in debt per year over the last couple of years. It is a step in the right direction, but it looks like it will be badly executed due to the inability of the two parties to cooperate on the issue.
SeinfeldisKindaOk;5685168I wish these cuts included the salaries of elected officials. They should have skin in the game. I read stuff won't actually happen until tomorrow since it's up to Obama what time he actually wants to start the cuts, meaning he could wait until midnight if he wanted. Also, how set in stone are these? Can they just reverse them in a few days if they feel like it?
Any sort of funding can be restored, but that would require an agreement on restoring said funding. I think only defense and infrastructure related things would get a free pass on that, others are SOL. I suppose Obama overestimated the pro-defense spending of some Republicans because some of them have been willing to cut defense along with other areas to lower deficit.
Obama, for his part as bound by the law when they passed it back in 2011, already set the sequester into motion. In the future parts of these could be restored in another plan, but seeing as the Republicans have stepped away adamant on no more revenue creation and only cuts, while Obama wants revenue creation, they'll likely not do anything about this in the immediate term.
Plus Obama can't get his sci-fi references right.