Congress failed to enact legislation that would have forestalled or modified sequestration before the March 1 deadline, thus the automatic spending cuts (50% defense and 50% non-defense) of approximately $85 billion for 2013 will be implemented over the coming weeks. The White House released its sequestration report that outlines the cuts for both defense and nondefense. Sequestration rates for non-exempt programs include:
Because the cuts are implemented over seven months instead of 12 months, the effective rate is: 13% defense and 9% nondefense. Besides sequestration, there are two other key fiscal timeframes facing Congress and the Obama administration. On March 27, the FY ’13 continuing resolution (FY ’13 appropriations) expires. If Congress fails to extend the continuing resolution by March 27, the government would shut down at that time. The federal government will reach the debt ceiling on May 19. All of these fiscal cliff issues will also affect how Congress will deal with the farm bill this year.