The Budget Control Act (BCA) of 2011, enacted into law on August 2, 2011, put into place automatic spending cuts for defense and non-defense spending, to be triggered if the established Joint Select Committee (JSC) failed to achieve $1.2 trillion in additional deficit reduction over the next ten years. The JSC failed to approve a plan, triggering the sequester to take effect on March 1 (after the American Taxpayer Relief Act moved the date from January 2, 2013). In addition, the BCA also reinstated discretionary budget authority caps under the Balanced Budget and Emergency Deficit Control Act of 1985, which could trigger a second, smaller sequester. On March 27, 2013, when the current continuing resolution (CR) is set to expire, spending will also need to be reduced further if spending levels exceed these caps. The caps are set for “security” and “nonsecurity” programs. According to Congressional Budget Office (CBO) estimates, security spending (which includes homeland security activities) will need to be reduced by an additional $6.8 billion and nonsecurity spending will need to be reduced by an additional $1 billion to satisfy the caps. This smaller “second sequester” is predicated on the assumption that final FY 2013 spending levels will be the same as those contained in the current CR. To the extent that final appropriations figures change, the need for a second sequester and/or its percentage will vary from current estimates. For more information, Funds Information for States (FFIS) recently published a brief explaining this “second sequester” and how it works.

Links: CBO Report; FFIS Budget Brief