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Sequestration is an amount of money equal to the difference between the cap set in the U.S. Budget Resolution and the amount actually appropriated. The difference is sequestered by the U.S. Treasury and not handed over to the agencies to which it was originally appropriated by Congress. The use of sequestration is authorized by the Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act of 1985.

In the past, Congress avoided sequestration by raising the caps set in the Budget Resolution; however, in 2013 sequestration cuts were implemented. Sequestration made notable cuts to programs targeting those living in poverty including Head Start, Women, Infants and Children Food and Nutrition Service (WIC), Medicare, Meals on Wheels, Section 8 Housing Choice Vouchers, and Low-Income Home Energy Assistance Program (LIHEAP).

The 2013 sequestration was a result of fiscal policies, namely, the Budget Control Act of 2011, which aimed at austerity or deficit reduction. The Budget Control Act requires that $1.2 trillion in federal spending cuts be achieved over the course of nine years. Sequestration lowers nondefense discretionary spending (i.e., certain domestic programs) by a range of 7.8 percent (in 2013) to 5.5 percent (in 2021) and defense spending from 10 percent to 8.5 percent during the same period. It is important to note that some programs, including Social Security, Medicaid, and the Supplemental Nutrition Assistance Program were exempt from sequestration cuts.

Short-Term Impact of Sequestration

Due to sequestration, the Head Start and Early Head Start budgets were cut by $400 million or 5.27 percent. This cut has resulted in a reduction of 57,265 students served by the Head Start program; 51,299 fewer children will be enrolled in Head Start, while 5,966 fewer children will be enrolled in Early Head Start. This represents a 5.7 percent enrollment cut, as there are an estimated 1 million children served by the Head Start program. Moreover, approximately 18,000 Head Start employees felt the effects of sequestration through either job loss or pay cuts. Local Head Start agencies have been forced to face the choice of cutting students, cutting staff members, cutting staff pay, and/or cutting transportation in order to meet their new budgets. The impacts on Head Start are particularly damaging to low-income children and families because, for many, Head Start provides adequate, safe, free child care and educational services. Without access to Head Start or its associated transportation, many families will face the prospect of job loss due to their lack of child care. Moreover, cuts to Head Start staff mean a loss of jobs for workers who already make less than the national median, thereby increasing the likelihood that they, too, will fall into poverty.

Many of the families facing cuts to Head Start also have to deal with potential budget reductions in the WIC program. In fiscal year 2013, WIC received $6.5 billion in funding (compared to $7 billion in fiscal year 2012). As of early 2014, the WIC program was able to withstand the budget cuts to continue serving 8.7 million women and children across the United States; however, budget cuts are looming for fiscal year 2015.

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