Because Congress cannot agree on a deficit reduction plan, sequestration or automatic spending cuts will go into effect on March 1.
In 2011 Congress passed the Budget Control Act which gave the Treasury additional borrowing authority, but it also put into place a requirement that Congress achieve $1.2 trillion in deficit reduction over 10 years. Because Congress has been unable to reach agreement on a deficit reduction plan, sequestration or automatic spending cuts will begin on March 1.
With a $1.3 trillion budget deficit in 2012 and a $16.5 trillion debt, it is obvious that the only way that spending will be ever be cut and deficit reduction achieved is by forcing Congress to do so through sequestration/automatic cuts. Congress and the president simply do no have the stomach to cut military spending and other nondefense discretionary spending. Defense, SS/Medicare and welfare accounted for 82 percent of government spending in 2012.
Is sequestration a good way to cut spending, no, but unfortunately it is the only way that wasteful spending will ever be cut. We have a $16.5 trillion debt and a $1.3 trillion budget deficit and Congress in unable achieve $1.2 trillion in deficit reduction over 10 years, which is really a sad commentary on our inept Congress.
Republicans do not want to cut defense and Democrats do not want to make the needed changes to social programs, so unless we want to have a $25 trillion debt in the near future, sequestration while not the best way to cut government spending, is the only way that deficit reduction will be achieved.
And even if $1.2 trillion in deficit reduction was achieved over 10 years, the normal growth of government will exceed the reduction and we will continue to have huge deficits.
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