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Sequestration: What Is It, and What Does It Mean?

By Della Cronin and Ellin Nolan

The path that has brought federal policymakers to the point of staring at impending “sequestration” is complicated. It includes one super committee, a threatened closure of the federal government, and endless finger pointing. But it essentially boils down to math. With so many talking heads pontificating on the latest misstep by a politician or yet another congressional budget battle, it can be difficult to keep up with the political and policy jargon. What sequestration could mean or how it could affect federal investments in education may not be clear to those outside the Beltway. For that matter, those inside the Beltway are still a little perplexed. Sequestration is complicated and unfamiliar and carries a general connotation of slashed spending. Although this is true, there are some nuances.

How Did We Get Here? 

President Obama signed the Budget Control Act (BCA) in August 2011—the result of highly publicized negotiations among the Senate, House, and White House. BCA mandated that the federal government reduce discretionary spending by at least $1.2 trillion over a 10-year period. To accomplish this, BCA imposed spending caps on federal discretionary spending for that period and also commissioned a Joint Select Committee on Deficit Reduction—the so-called Super Committee. The committee developed a detailed deficit reduction plan that cut an additional $1.2 trillion over the same 10-year period, bringing the total deficit reduction to $2.2 trillion. However, BCA included a mandate, intended to incentivize the committee’s negotiations, calling for automatic spending cuts that would be triggered under sequestration if a bipartisan compromise for long-term deficit reduction were not developed. Even though the Joint Select Committee on Deficit Reduction was both bipartisan and bicameral, it failed to reach consensus in November 2011. The committee’s inability to come up with a plan and Congress’s continued gridlock on the matter set the federal government on course for sequestration. That sequester would consist of reductions taken equally from both the defense and nondefense sides of the budget. The first cuts from this sequester would take effect on January 3, 2013.

What Does the Sequester Do? 

The deficit reduction sequester is designed to enforce savings of $1.2 trillion through 2021. For 2013, that means a $55 billion cut in defense spending and an identical $55 billion cut in nondefense spending. If Congress is not able to find an alternative to the 2013 sequestration requirement during the lame-duck session this November, the sequester will take effect on January 2, 2013. This will require an across-the-board cut of approximately 8.2 percent from every federal program, except for those on a list of exempt entitlement programs, representing equal numbers of defense and domestic programs. Entitlement programs that are exempt from the sequester include Social Security, food stamps, children’s health insurance, Social Security disability insurance, veteran’s compensation, and other tax and retirement benefits. Starting in 2014 and continuing through 2020, the required reductions will include the Pell Grant program, which is exempt in the first year. Because Pell Grants make up nearly 40 percent of the education budget, that addition should have some mitigating effect. Each year Congress will have to decide how the cuts are distributed among federal programs to meet the mandatory spending caps. In addition, the budget cuts from sequestration from nondefense spending are estimated to total $54.7 billion eachyear. Of course, this is just an estimate. Many factors, such as reduced interest payments on the declining debt, will influence these future decisions.

What Happens to Education Funding during the Sequester? 

The federal investments that support K–12 and higher education are part of the budget’s nondefense discretionary spending. Thus, the impact of the initial 8.2 percent budget cut in 2013 on funds for Title I, special education, and math and science partnership programs, among others, will total $4 billion in 2013. Grants from the National Science Foundation will also be cut by 8.2 percent. If these across-the-board cuts go into effect in 2013, the effects of cuts on federal programs going forward would again be at the discretion of the Congress. As already noted, with Pell Grant funding added to the eligible pool of cuts, the impact on education funding could be reduced, but not eliminated, since Congress would have to keep overall government spending within the BCA caps.

The November lame-duck session could bring a decision about how Congress will implement or modify the sequester. BCA requires its implementation, so a delay or redefinition will require Congress to amend the law and receive the president’s approval. The looming specter of severe cuts has created new—and broad—coalitions in the education and research communities. The newly formed Non-Defense Discretionary Coalition is bringing together diverse interests to convey a unified message: the sequester will have a devastating effect on education, health, public safety, research, and other programs. In addition, those in the defense industry are quite concerned that the prospective cuts will adversely affect their work and the country’s national security.

What Is NCTM Doing? 

NCTM has joined its colleagues in the STEM education and other education communities to voice concern about the various potential effects of the sequester. It is also reminding established friends on Capitol Hill of the programs and agencies that are so important to math educators and classrooms. The coming months will be crucial as the education community wrestles with the sequester and its effect on schools, classrooms, teachers, and students nationwide.

Della B. Cronin and Ellin Nolan are with Washington Partners, LLC.

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