Government Bytes


Spotlight On Sequestration

by Michael Tasselmyer / /

In addition to three new and notable bills we've recently scored, NTUF is dedicating a portion of this week's edition of The Taxpayer's Tab to an issue that could play a pivotal role in the ongoing budget discussions: sequestration.

The automatic, across-the-board cuts went into effect earlier this year, and have impacted a wide range of government agencies and programs. The budget committee that's been tasked with finding common ground between House and Senate budget proposals is already facing pushback from lawmakers who want the sequester repealed or replaced.

There have been several attempts in the 113th Congress to repeal the cuts that are scheduled to go into effect in 2014. For reference, a brief outline of those bills:

  • H.R. 505: Rep. Keith Ellison's (D-MI) Balancing Act would repeal the sequester cuts in their entirety and replace them with tax increases for corporations and individuals. It would also increase investment in infrastructure projects and job training, and restrict certain types of military spending.
  • H.R. 699: Rep. Chris Van Hollen (D-MD) introduced the Stop the Sequester Job Loss Now Act in February. In addition to repealing the 2013 cuts and modifying several provisions in the tax code, Rep. Van Hollen's bill sought to reduce 2014 budget cuts by $27.5 billion.
  • H.R. 849: Under Adam Smith's (D-WA) Sequestration Relief Act of 2013, sequester cuts would be repealed and partially offset by a reduction in discretionary spending caps.
  • H.R. 857: The Protect Troops at War Act, introduced by Rep. Paul Cook (R-CA), would eliminate 2013 and 2014 sequester cuts to the Department of Defense.
  • H.R. 900: Rep. John Conyers (D-MI) introduced the Cancel the Sequester Act of 2013, which, as the name implies, would outright repeal all scheduled sequester cuts.
  • H.R. 2060: Rep. Van Hollen also introduced this bill, which would repeal (rather than reduce) the 2014 sequester and lower discretionary defense spending limits.
  • S. 388: Senator Barbara Mikulski's (D-MD) American Family Economic Protection Act of 2013 would reduce 2014 sequestration cuts, adjust tax rates for wealthy individuals, and eliminate certain direct payments to agricultural producers.

Most of the legislation discussed above varies significantly in scope and specificity, which makes a blanket cost estimate for any attempt at 2014 sequester repeal difficult to formulate. However, NTUF arrived at a score using the $109.3 billion total 2014 sequester level and the Congressional Budget Office's estimate of how outlays would be affected in the case of a 2013 repeal. By analyzing CBO's projected yearly outlay effects as a percentage of that year's total authorizations, we estimated that if the 2014 sequester were repealed entirely, federal spending would increase by $105.6 billion over four years, or $26.4 billion annually. Note that our estimate is preliminary and subject to revision should new information become available.

Whether sequester cuts are maintained, repealed, reduced, or replaced by some combination of tax hikes and other spending reductions, the implications for taxpayers could be significant.