The Clock is Ticking on Sequestration
December 3, 2012
With only three weeks left in the 112th
Congress and less than a month to go before the deadline for the “fiscal
cliff,” the White House and congressional leaders have made little
progress in addressing the expiring tax
cuts and automatic, across-the-board spending cuts to discretionary programs
known as sequestration. While sequestration is only a part of the larger fiscal
cliff, it will have the greatest impact on funding for CTE. If Congress does not act by
January 2, sequestration will result in an 8.2 percent reduction in funding for
most federal discretionary programs. This means that Perkins stands to lose
approximately $92 million in July 2013 alone!
Last week, Treasury Secretary Tim Geithner met with
congressional leaders to present the White House’s proposal for averting the
fiscal cliff. The plan includes $1.6 trillion in new revenue generated by allowing
income tax rates on those who earn over $250,000 to go up, along with increases
in the estate tax and capital gains tax. It still calls for $1.2 trillion in
discretionary spending cuts, but would replace the automatic, across-the-board
sequestration cuts. The plan would also extend the Social Security payroll tax
cut and unemployment insurance benefits.
Congressional Republicans have rejected the plan, with
House Speaker John Boehner (R-OH) countering that the White House had not put
forward a serious offer and is not negotiating in good faith. Republicans continue
to resist increasing tax rates and argue that the spending reductions in the
proposal utilize too many budgetary gimmicks that will not reduce deficits.
President Obama has also requested unilateral power to increase the federal
debt ceiling, which currently requires congressional approval. He also wants an
additional $50 billion for a multiyear stimulus program—a nonstarter for
Republicans who have consistently criticized his earlier stimulus package for
being ineffective in boosting the economy.
We will continue to keep you updated with new developments
from Washington. You can find more information on our sequestration web page.