Sequestration (Government Spending)

Sequestration is a procedural mechanism that triggers automatic spending cuts when an agency exceeds its allocated budget. Established by the Budget Control Act of 2011, it empowers the Office of Budget Management to determine if discretionary programs have surpassed budget limits. The Congressional Budget Office (CBO) plays a role in identifying these breaches. Each year, Congress must set statutory caps for sequestration to be activated. If these caps are not established, sequestration is not triggered. In essence, sequestration ensures fiscal discipline by enforcing budgetary limits.

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