Definition of Sequester, səˈkwestər: v. Isolate or hide away something, n. a general cut in government spending.
Origins. The word is derived from 4th century Roman teacher Vibius Sequester who did an alphabetical list of geographical names used by Roman poets in their writings. The randomness of that list is akin to the sequestration process where budget cuts are made in a random manner with no regard to importance. Worth noting, Sequester had a son named Virgilius Virgilianus. Why Sequester had a son with the surname Virgilianus is anyone’s guess…but then so does the sequestration process. A synonym of the last two syllables of Sequesters’ son’s name is a good word to use when referring to most members of the 113th Congress.
Leon Panetta, the Secretary of Defense during the first Obama term called sequestration “legislative madness.” He used a telling analogy of the process during a speech at Georgetown University, “For those of you who have ever seen ‘Blazing Saddles,’ (there) is the scene of the sheriff putting the gun to his head in order to establish law and order.” The sheriff’s approach to law enforcement is what Congress and the President are doing in the budgetary process.
The only things exempted from the sequestration process are social security, Medicaid, food stamps and (of course) the paychecks of those in Congress. Medicare is subject to a budget cut although that cut is limited to 2% although this does not begin until April 1st.
While sequestration will cut $1.2 trillion over ten years, the amount cut 2013 is $85 billion from the government’s $4 trillion plus budget. This number was chosen as it was the amount rating agencies required in order for the U.S debt rating to avoid a downgrade. With $16.5 trillion in federal debt and tens of trillions more in unfunded obligations, the cuts are a reasonable amount given that government borrows more that 40 cents of every dollar it spends.
Sequestration cuts 9.4% of discretionary defense spending which equates to over $46 billion of the departments $525 billion budget in 2013 as well as 8.2% of discretionary non-defense spending. Up to $900 million in small business loan guarantees are cut, $130 million in Native American funding is lost and 1,200 inspectors in OSHA (Occupational Safety and Health Administration) are furloughed. There are estimates that up to 750,000 jobs in the health care industry could be lost due to the 2% cut in Medicare.
Starting in March, federal workers, those receiving grants or government contracts are notified that they may be furloughed or have their funding curtailed. At the end of March, some furloughing begins. Cutbacks in the national park system may be one of the areas hardest hit early on. The Pentagon has stated that workers would be furloughed for one day a week. HUD (Housing and Urban Development) would cut seven workdays through August 30th.
On March 27th, all funding for non-essential government agencies ceases. As most departments will still have most of their funding in place, the impact on the services they provide with not be seen early on.
Most believe that a deal will be struck in the next 45 days. If no deal is struck, the debt ceiling will be reached sometime before the end of August. As the stock market has shown, few on Wall Street believe that sequestration will have any lasting impact on the economy. They believe a recovery is coming.
The bigger issue that will need to be resolved is the total dysfunction in Washington that has the potential to undermine a shaky recovery.
