The Threat of Sequestration and the Black Community

A Policy Brief of The National Urban League Policy Institute


Overview

The threat of a looming 'fiscal cliff' with its promise of automatic cuts to the federal budget commonly referred to as 'sequestration' is the most pressing domestic economic issue facing the White House and U.S. Congress in the final weeks of 2012.

In its August 2012 release, 'An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022', the Congressional Budget Office warns that automatic sequestration could potentially drive the US economy into a renewed recession, with sustained unemployment levels of 9% and higher. Recent turbulent activity in financial markets and the private business sector show that the very possibility of a failure to reach a political agreement regarding the nation's financial health carries its own negative consequences.

The result has been a collective public outcry for Washington policymakers to avoid the perils of automatic sequestration and related tax increases at all costs.

The facts established by the Great Recession and recent legislative developments in Washington prove that the worst economic hardships caused by an impending fiscal cliff would undoubtedly fall to the most vulnerable amongst us, with an especially heavy toll for African Americans.

The Budget Control Act (BCA) of 2011 mandated spending caps on a variety of discretionary programs that will slash funding by roughly $1 billion over the ten years from 2012 through 2021, relative to the Congressional Budget Office (CBO) baseline from 2010.

In 2013, the automatic across-the-board cuts will mean an 8.4 percent cut in most non- defense discretionary programs, a 7.5 percent cut in affected defense programs, an 8.0 percent cut in affected mandatory programs other than Medicare, plus a 2.0 percent cut in Medicare provider payments. These levels will shrink over time in the remaining years from 2014 through 2021.

Click here to read the full policy brief on 'The Threat of Sequestration and the Black Community'.

Click here to read the fact sheet on 'Key Proposals in President Obama's Fiscal Year 2014 Budget'.