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Congress is arguing over whether the best way to balance the budget is by cutting spending, raising taxes, or a combination of the two. (Shutterstock)

What the Heck Does Sequester Mean?

A budget battle in Washington forces the government to make major spending cuts

By Tyrus Cukavac | March 4 , 2013

You might have heard the word sequester in the news lately. But what is a sequester, and why are people talking about it so much?

A sequester is a cut in the amount of money the government is allowed to spend. The government’s recent sequester went into effect on March 1. Many federal (national) agencies have to cut a total of $85.4 billion from their expenses, the money they spend, by September.

Many experts say the sequester could hurt the U.S. economy. Gene Sperling, the director of the White House Economic Council, believes around 750,000 people who work for the government could lose their jobs. Some other government workers could be forced to take leave without pay. But because the economy is so complicated, no one knows for sure what effects the sequester will have.

HOW DID WE GET HERE?

The United States government has a budget problem. A budget is a list detailing how a person or an organization spends money. For much of the country’s history, the U.S. government has spent more money than it has. This has caused the amount of money the government owes, called the national debt, to balloon. The national debt is now more than $16 trillion!

The two major political parties in the U.S., the Democrats and the Republicans, don’t see eye-to-eye on how to solve the problem. Republicans believe the government needs to cut spending. Democrats say that’s part of the solution, but most of them firmly believe the government also needs to raise taxes to lower the debt.

Lawmakers in Congress, which creates the budget, had a big argument about the issue in 2011. They weren’t able to come to a final agreement. So they created the sequester as a backup plan.

Under the plan, if Congress could not agree on a budget, mandatory cuts in spending would take effect in 2013. Because some of these spending cuts were unpopular, politicians hoped the plan would force members of Congress to work together for a better solution. But after months of debate, the deadline for a new budget expired. The sequester measures became law on Friday.

WHAT HAPPENS NOW?

The sequester cuts 2 percent of the federal budget. That budget funds the U.S. military, some health-care programs, national parks, and many government agencies. The government has seven months to make these spending cuts, so it will be some time before the full effects of the sequester are felt.

In addition to possible job losses around the country, citizens may notice the effects of the sequester in other ways. Some national parks, like Yellowstone, will have to delay their openings because they can no longer afford to clear their roads of snow. School programs that receive federal funding may also be affected. And health care coverage for procedures like flu vaccinations could be affected for some Americans.

After 2013, the government will need to cut $109.3 billion per year until 2021, if the sequester stays in effect.

Congress can still replace the sequester with a new spending plan. President Obama is working with congressional leaders to come up with an alternate solution. But both political parties will need to compromise for any plan to become law.

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