TeachMeFinance.com - explain sequestration
sequestration -- The cancellation of budgetary resources available for a fiscal year in
order to enforce the discretionary spending limits and pay-as-you-go procedures in that year. Pursuant
to procedures set forth in the Deficit Control Act, a sequestration is triggered if the Office of
Management and Budget determines that budget authority or outlays provided in appropriation acts exceed
the discretionary spending limits or that enacted legislation affecting direct spending and receipts
increases the deficit or reduces the surplus. Discretionary spending in excess of any of the limits
would cause the cancellation of budgetary resources within the applicable category of discretionary
programs. Changes in direct spending and receipts that increase the deficit or reduce the surplus
would result in reductions in direct spending programs not otherwise exempt by law.
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