Sequestration

The final stage in the budget process is a tool designed to help reduce the federal budget deficit. Sequestration is a way to automatically reduce government spending without Congress having to vote to cut certain programs. Before sequestration can be triggered, Congress first passes a cap either on the size of the deficit or on total federal spending. If the deficit or spending level exceeds the cap, sequestration occurs which reduces all federal spending equally in the amount necessary to meet the cap. For example, if the total amount that Congress appropriated for a given year exceeds a previously set cap on spending by one percent, then every federal program would be reduced by one percent.

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