What is sequestration budget

Secondly, the sequester of discretionary programs was applied across-the-board, whereas the sequester offers some flexibility. Specifically, the reductions to discretionary spending for FY and beyond, unlike in FY, take the form of lower statutory caps separately on defense and non-defense funding, giving appropriators the opportunity to set priorities within the topline limits.

Importantly, there is no additional flexibility on the mandatory side, where cuts to Medicare and other mandatory programs, which are already ongoing, continue unabated from FY So far, Congress has not used this additional flexibility.

Importantly, the entire additional cut will take place on the defense side of the budget. What Happens to Discretionary Spend i ng After ? For a table that compares the BCA austerity-level discretionary caps and the caps as modified by the Bipartisan Budget Acts of , , , and see the Appendix. On the mandatory side, the BCA required across-the-board cuts to non-exempt funding. Congress has extended the mandatory sequester several times. The required spending cuts in the BCA were intended to come half from defense programs and half from non-defense programs.

The defense category is the federal budget's national defense function, which includes the Department of Defense, nuclear-weapons related activities at the Department of Energy, and the national security activities of several other agencies such as the Coast Guard and Federal Bureau of Investigation.

Non-defense is everything else. The defense category has few mandatory programs, so nearly all the defense reduction was applied to discretionary programs. On the non-defense side, roughly one-third of the non-defense savings originally came from mandatory spending and the rest from a reduction in discretionary spending. Within each category, the BCA allocated the savings proportionally across discretionary and non-exempt mandatory programs.

On the mandatory side, each year the Office of Management and Budget OMB calculates the percentage and dollar amount to be taken from affected programs to achieve the total mandatory cut required by the BCA. When Congress raised the discretionary caps, it directed that the mandatory sequester calculations be made as if the caps had not been raised.

Unlike discretionary spending caps, which expire after , sequestration of mandatory spending has been extended on several occasions. The BBA of extended the mandatory sequester through , and then a law modifying military retiree benefits extended the sequester through These extensions did not specify the amount of savings that the sequester would need to achieve in fiscal years after FY , but instead directed OMB to apply the percentage reductions calculated for FY to subsequent fiscal years.

Sequestration Update Report: August August 13, August 15, February 25, April 2,