21 Nov Sequestration 101

Introduction

Sequestration is an across the board cut to federal discretionary spending set to occur on January 2, 2013. It could negatively affect every major federal discretionary spending program and fundamentally change the way that schools operate. Admittedly, budget cuts are a dry topic. However, budgets also reflect society’s values and priorities. Understanding sequestration might allow you to better understand America’s values and priorities for the next decade.

What is Sequestration?

Sequestration is the result of the Budget Control Act (Public Law 112-25). The Budget Control Act was the major resulting compromise from the 2011 debt ceiling debate. Among other things, the Budget Control Act mandated:

1. That a bipartisan & bicameral Congressional committee (aka the Super Committee) identify initiatives that would reduce the deficit by $1.2 trillion over ten years and;
2. If the Super Committee failed to achieve its mandate by November 23, 2011, then sequestration would to go into effect on January 2, 2013.

How Does Sequestration Change Education?

Under sequestration, fiscal year 2013 federal education funding will be cut by as much as 9.1 percent[iii] or $4.1 billion. In other words, federal education funding would roll back to pre-2003 levels. It is estimated that this $4.1 billion dollar cut would lead to:

• 90,000 lost educator jobs
• $1.3 billion cut to Title I, impacting 1.7 million students.
• $1 billion cut to IDEA funding, impacting 536,000 students with disabilities
• $102.2 million to Perkins Career and Technical Education Basic State Grants, impacting 1.4 million students.

What are Policymakers Doing?

There is bipartisan agreement that sequestration is not the best way to move forward. For instance, in a recent Senate Labor, Health and Human Services (HHS), and Education Appropriations Subcommittee meeting, subcommittee Chairman Tom Harkin (D-IA) stated:

“It (sequestration) would also have destructive impacts on the whole array of programs that undergird the middle class in this country—everything from education to job training, medical research, child care, food safety, national parks, border security, and safe air travel.”

Similarly, Senator Richard Shelby (R-AL), the top Republican on the subcommittee, stated that

“…the across-the-board cuts mandated under sequestration “are not the answer to confront our fiscal problems…”

Champions for sequestration affected agencies, like Education Secretary Duncan, are urging Congress to act before Sequestration goes into effect. It is expected that Congress will act in the lame-duck session to head off or delay the sequester.[vi] However, there is no guarantee that Congress will act in the lame-duck session.

It is likely that the federal government will have to cut spending, increase revenue, or use a combination of the two measures to achieve America’s fiscal goals. Hope Street Group has supported measured, reasoned and bi-partisan fiscal measures to continue America’s economic growth and Hope Street Group continues to support similar measures.

What is next?

It is important that educators, health care providers and all citizens be engaged in the political process, especially a high stakes process like sequestration. Even though sequestration would take effect in January 2013, many budget experts expect that sequestrations effects have been felt since October 1, 2012; October 1 is the day agencies set their spending levels for the fiscal year.