The Big Bad Sequester Wolf


Sequestration, the budget mechanism that kicks in if and only if Congress does not budget to the caps set under the 2011 Budget Control Act, has been framed as the big bad wolf of Washington. But this frequent mischaracterization of sequestration as a vague, threatening entity neglects a key facet of budget construction: sequestration won’t kick in unless Congress fails to do its job.

At his confirmation hearing last month, Defense Secretary Ashton Carter said to the committee in his opening remarks, “I very much hope that we can find a way together out of the wilderness of sequester. Sequester is risky to our defense.”

“The wilderness of sequester.” Sounds scary, right? Of course it does.

But sequestration on its own isn’t actually a threat. In fact, sequestration on its own isn’t really a thing.

Flashback to July 2011. The United States was in a debt-ceiling crisis that rocked the markets harder than any financial happening since the 2008 financial crisis. In August, President Barack Obama signed into law the Budget Control Act (BCA) of 2011. This ended the debt-ceiling crisis and “established budget enforcement mechanisms that were estimated to reduce the federal budget deficits by a total of at least $1.2 trillion from 2012-2021.”

The BCA contained two mechanisms intended to alleviate the budget deficit: deficit reduction sequester and discretionary sequester, together known as “sequester” (or sequestration).  Under the BCA, a Congressional supercommittee had to find $1.2 trillion in savings, or else. The supercommittee failed to come to an agreement, and that ‘or else,’ that is, sequestration, kicked in.

The American Taxpayer Relief Act of 2012 and the Bipartisan Budget Act of 2013 substantially cut sequester levels for FY 2013-2015, providing relief. But the potential for sequestration is now back on the table, again, if and only if Congress does not budget to the caps set under the 2011 BCA.

All of the noise being made about the possibility of sequester is particularly funny in light of the fact that sequestration isn’t a new concept. The process of sequestration was established in the Balanced Budget and Emergency Deficit Control Act of 1985, 30 years ago. What’s more, Congress played nice and budgeted to the caps from 1990 until 2002 as part of the Budget Enforcement Act of 1990. And the budget caps are a good thing. They necessitate responsible budgeting and help alleviate our national debt.

But as we head into FY 2016, folks at the Pentagon and in Congress, like John McCain and Mac Thornberry, are eager to name the big, bad sequester wolf as their biggest fear; but if Congress does its job, sequestration will not be triggered. And they even have a few options for how they might choose to do that job. Congress could amend the caps, scrap them altogether, or simply budget to the caps. The Bipartisan Budget Act of 2013, also known as the Murray-Ryan deal, amended the caps and postponed the potential for sequestration through FY 2015.

Congress could also revoke the 2011 BCA — although that would require what appears to be politically impossible: compromise. Democrats are reluctant to cut funding for entitlement programs like Medicare and Medicaid and Republicans don’t want to raise taxes.

So sorry, Congress. Sequestration isn’t inevitable. It only kicks in if you let it. You don’t get to cry wolf right now.