Fact Sheet: Bipartisan Debt Deal: A Win for the Economy and Budget Discipline
The Deal Includes An Automatic Sequester to Ensure That At Least $1.2 Trillion in Deficit Reduction Is Achieved By 2013 Beyond the Discretionary Caps: The deal includes an automatic sequester on certain spending programs to ensure that—between the Committee and the trigger—we at least put in place an additional $1.2 trillion in deficit reduction by 2013.
Consistent With Past Practice, Sequester Would Be Divided Equally Between Defense and Non-Defense Programs and Exempt Social Security, Medicaid, and Low-Income Programs: Consistent with the bipartisan precedents established in the 1980s and 1990s, the sequester would be divided equally between defense and non-defense program, and it would exempt Social Security, Medicaid, unemployment insurance, programs for low-income families, and civilian and military retirement. Likewise, any cuts to Medicare would be capped and limited to the provider side.
Sequester Would Provide a Strong Incentive for Both Sides to Come to the Table: If the fiscal committee took no action, the deal would automatically add nearly $500 billion in defense cuts on top of cuts already made, and, at the same time, it would cut critical programs like infrastructure or education. That outcome would be unacceptable to many Republicans and Democrats alike – creating pressure for a bipartisan agreement without requiring the threat of a default with unthinkable consequences for our economy.
Now, they call those cuts “unacceptable,” but the sequester did meet President Obama’s top priorities – exempting Social Security, Medicaid, unemployment insurance, programs for low-income families, and civilian and military retirement. You only get so many top priorities. If you want to defend some areas of the budget from any cuts – you know, $85 billion out of a $3.8 trillion in a year with a projected deficit of $901 billion – you have to make some cuts in other areas. Cuts that range between 2 percent for Medicare and 10 percent for mandatory defense spending.
The sequester was a bet by the leadership of both parties in July 2011. Speaker Boehner bet that the next time he had to deal with the sequestration cuts, he would be working with President Romney; President Obama bet that the next time he had to deal with the sequestration cuts, he would be working with Speaker Pelosi. They both lost.