In August 2011, Congress and the President reached an agreement to raise the national debt limit and reduce the national debt, and passed the Budget Control Act (BCA) of 2011 (also sometimes referred to as the “debt ceiling” deal).
The law put a cap on discretionary spending over the next decade (equaling, in effect, over $900 billion in cuts to federal spending over 10 years), starting in FY2012.
Additionally, the law created a special bi-partisan congressional committee, the Joint Select Committee on Deficit Reduction (referred to as the “Super Committee”), tasked with developing a proposal to reduce the federal deficit by an additional $1.2 to $1.5 trillion over the next ten years. The law provided that if Congress failed to pass the recommendations of the committee, or otherwise provide for a reduction in the deficit of at least $1.2 trillion, then automatic across-the-board cuts (sequestration) would be triggered
The cuts (sequestration) will be split evenly between security and non-security programs.
The cuts will not affect certain entitlement programs for poor and low income individuals and families, such as Medicaid and Social Security. However, Medicare will face cuts to the provider side of the program, and will affect provider reimbursement. The cuts will not impact Medicare beneficiaries.
On November 21, 2011, the Joint Select Committee on Deficit Reduction (referred to as the “Super Committee”), announced that it had been unable to reach any sort of bi-partisan agreement to lower the nation's deficit, and disbanded. This precipitated the sequestration cuts described in the BCA.
The sequestration cuts laid out under the Budget Control Act of 2011 are scheduled to take effect, in accordance with the provisions of the law, starting in January 2013.
To learn more about the sequestration cuts and how it will affect HIV programs, click on the link to the left.