United States

Sequestration order explained


On March 1, 2013, President Barack Obama signed the sequestration order for reduction of budget spending for fiscal year 2013. The order provides a breakdown by budgetary account and reduction amounts for each government agency. For a full account of calculations and reductions, see the related Office of Management and Budget Report.

The report indicates that over the course of the fiscal year, the sequestration requires a 7.8 percent reduction in non-exempt defense discretionary funding and a 5.0 percent reduction in non-exempt nondefense discretionary funding. The sequestration also requires reductions of 2.0 percent to Medicare, 5.1 percent to other non-exempt nondefense mandatory programs, and 7.9 percent to non-exempt defense mandatory programs. Because the cuts have to be achieved in approximately seven months, “…the effective percentage reductions will be approximately 13 percent for non-exempt defense programs and 9 percent for non-exempt nondefense programs,” according to the report.

The president’s order and related report provide some insight on the effect of sequestration on government programs and indicate which programs are impacted, respectively affecting government contracts and grants funding.

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