When did the word “sequestration” first penetrate our mainstream American vocabulary? It’s generally used in a trial when the jury is sequestered so they can’t talk to anyone about the case.
Merriam-Webster’s dictionary has several definitions that don’t seem to apply to our budget’s current disposition, although it does say that, in law, sequestration is a writ authorizing a law-enforcement official to take custody of a defendant’s property in order to enforce a judgment.
Regardless of what we used to think it means, the word is on everybody’s radar now. In the days leading up to the March 1, deadline, the usual hype led to speculation about the automatic spending cuts and their impact on the country’s growth.
The budget plan President Obama proposed in 2012 calls for reducing the value of itemized deductions and certain tax exclusions for taxpayers in higher than the 28 percent tax bracket. As for corporate taxes, he wants to close loopholes to effectively lower tax rates from 35 to 28 percent for most corporations; 25 percent for manufacturers.
While many liberal Democrats have dug their heels in the sand on entitlement spending cuts, the President has offered to reduce Medicare spending by $400 billion over 10 years, change an inflation formula for government benefits that would result in lower cost-of-living adjustments for Social Security and other programs, and reduce other spending for total reductions of $900 billion over 10 years.
Many pundits have pointed out that the implications of the automatic spending cuts will not be immediately evident. However, while the crisis may not be felt nationwide, it will be felt personally. Affected Americans include navy shipbuilder small business owners and workers whose defense budget contracts get cancelled. Additionally, custodians and security guards at the Capital will receive an immediate pay cut.
As we meander through this year with continued political and economic uncertainly, perhaps we can take a little more control back in our own lives. If you’ve been threatening sequestration cuts in your own household spending, perhaps it’s time to either make them happen or figure out how to get your assets working harder to earn more income. We’re here if you’d like some guidance to help you do that.
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