Sequestration: Will It Never End?

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Original story posted on: May 10, 2021

The sequester is expected to end next year in the absence of any legislation.

Times change –  there was a time when deficit spending caps were the talk of Washington, D.C. In 2011, then-President Obama signed the Budget Control Act of 2011 (BCA) as part of an agreement with Congress to resolve the debt-ceiling crisis. The federal government can’t increase the national debt without, as the saying goes, an act of Congress.

The legislation created a Joint Select Committee on Deficit Reduction (the "super committee") to produce legislation by late November that would decrease the deficit by $1.2 trillion over 10 years. When the super committee failed to act, another part of the BCA went into effect. This effected automatic across-the-board cuts (known as "sequestrations") to be split evenly between defense and domestic spending, beginning on Jan. 2, 2013.

These caps have been a political football ever since. 

In an act of almost unheard-of bipartisanship, the House of Representatives two weeks ago voted 384-38 to pass a bill that, among other healthcare provisions, would eliminate the 2-percent across-the-board cut to all Medicare payments, until the end of 2021.The Senate passed the bill last month, and President Biden is expected to sign it into law soon.

The 2022 midterm elections are going to determine if the House and Senate are going to skip back in time and remember their debt-ceiling concerns. It seems that these concerns are often just cover for the ongoing political squabbles that seem to thwart things from ever really moving forward.

Even without legislation, the sequester will end next year, at the end of the 10-year period cited in the BCA. 

Programming Note: Listen to Tim Powell every Tuesday during Talk Ten Tuesdays, 10 a.m. Eastern.

Timothy Powell, CPA

Timothy Powell is a nationally recognized expert on regulatory matters, including the False Claims Act, Zone Program Integrity Contractor (ZPIC) audits, and U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) compliance. He is a member of both the RACmonitor and ICD10monitor editorial boards and a national correspondent for both Monitor Mondays and Talk Ten Tuesdays.

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