Is the ‘Budget Sequester’ Back? We Can Hope (Opinion)

The Budget Control Act (BCA) of 2011 included a “budget sequester,” a fallback mechanism if Congress couldn’t agree on a budget—which it couldn’t. Remarkably, the sequester actually reduced federal government spending, at least for a while. The recently passed Fiscal Responsibility Act (FRA) also includes a budget sequester mechanism. And there is a good chance it too will be implemented.

The BCA created the Joint Select Committee on Deficit Reduction to determine how to control federal spending. The committee failed to produce a compromise, which triggered the law’s budget sequester provision. It went into effect in March of 2013. It was the first time in modern history that federal spending in certain areas declined, as opposed to just growing at a slower pace.

As Rep. Andy Barr says in his FRA press release, “One of the most significant wins in the deal for fiscal conservatives is a provision to impose an automatic 1% across the board reduction in discretionary spending if lawmakers fail to pass all 12 annual appropriations bills by January 1st.”

What Rep. Barr is referring to is what’s called “regular order.” For decades, 12 committees in the House of Representatives would pass a budget to fund their respective functions of government. The Senate would do the same, and then representatives of the House and Senate would meet to iron out a compromise on each bill.

But that process broke down several years ago. The result was some type of last-minute omnibus bill that often included lots of extraneous spending, or a continuing resolution (CR) that essentially kept federal funding at current levels, with perhaps a few tweaks.

Conservatives have long wanted to return to regular order, but it’s been a tough slog.

The FRA creates an incentive to return to regular order. If Congress fails, there is a 1 percent across-the-board cut in discretionary spending, which most members don’t want.

Given the challenges to returning to regular order, the odds are good that Congress won’t pass all 12 appropriations bills by the end of the year. That would result in the sequester’s 1 percent across-the-board cut.

Since that sequester approach hits all discretionary spending with the same budget-cutting hammer, it’s a very imperfect way to control spending. But at least it’s a way.

And since Congress has demonstrated it can’t, or won’t, control spending, a new budget sequester may be the only way.

Originally published by Institute for Policy Innovation. Republished with permission.

For more great content from Budget & Tax News.