• Sequestration & Your Contracts
  • August 22, 2012 | Author: Alan I. Saltman
  • Law Firm: Smith, Currie & Hancock LLP - Washington Office
  • Under the Budget Control Act of 2011, P.L. 119-28 (August 2, 2011), funding for a variety of federal programs will be reduced by nearly $1 trillion over the ten years from 2012 through 2021. The Act also established the now-infamous “Super Committee” (officially the Joint Select Committee on Deficit Reduction) which, it was hoped, would come up with legislation reducing deficits by $1.2 trillion over that period. In an effort to foster compromise, the Act included a “Sword of Damocles” in the form of a “Sequestration” procedure - automatic, largely across-the-board spending cuts to both defense and non-defense programs that would kick in if the Super Committee failed to reach an agreement that could pass both houses. Because the members of the Joint Committee were unable to reach a compromise, Sequestration is presently scheduled to occur starting in January 2013 (i.e., four months into FY 2013).