The recent series of budget crises in the U.S. has introduced new buzzwords to the U.S. public and to the world.
Words like “sequester,” “debt ceiling,” “continuing resolution,” and “fiscal cliff” have been broadening our vocabulary. Other words like “supercomittee” and “discretionary spending” have been introduced to us in ways never before. Phrases like “looming budgetary showdown” and “impending financial doom” have been enriching us and expanding our literary world.
Here is a rundown on some of the buzzwords:
Sequester vs. Fiscal Cliff – same thing – different name?
Yes! But not exactly. The Fiscal Cliff was to be a mix of tax increases and indescriminant slash-and-burn spending cuts. Just after the fiscal cliff went into effect at the beginning of January, the governement voted on the revenue (tax) side of the Fiscal Cliff, getting rid of most of the tax increases for the poor and middle class.
The government actually enacted this legislation on the 1st and 2nd of January, but backdated it to the 1st of January. So, technically, the U.S. did go over the fiscal cliff for about a day.
Congress then postponed adressing the spending cuts until March 1st. This would become known as “sequestration.” Anyway, we just passed the March 1st deadline, bringing sequestration into effect.
The cuts are focused mostly on “discretionary spending.” The cuts will be spread about 50 – 50 between defense and domestic programs.
The 2013 sequester includes:
- $42.7 billion in defense cuts (a 7.9 percent cut).
- $28.7 billion in domestic discretionary cuts (a 5.3 percent cut).
- $9.9 billion in Medicare cuts (a 2 percent cut).
- $4 billion in other mandatory cuts (a 5.8 percent cut to nondefense programs, and a 7.8 percent cut to mandatory defense programs).
(according to the Washington Post.)
It will cut money slated for an enormous number of programs, including the FBI, border security, special education, NASA, federal prisons, public housing, head start, and on and on and on…
The biggest hit goes to the military. Programs will be cut and people furloughed.
Some people claim that the cuts are only 2 percent of the entire federal budget. However, the cuts are focused on discretionary spending. They are not spread over the entire budget. So the actual cuts to these programs will be higher than 2 percent.
Let’s hope the government can work together to create legislation with fewer cuts or more “targeted” cuts to lessen the effects. Many of these cuts could probably be put off to a later date – not in the middle of a recession.