Special Analysis 12-03
October 15, 2012

Under current law, the Budget Control Act (BCA) sequester is scheduled to occur on January 2, 2013. Both the House and the president have proposed alternatives to reverse some or all of the automatic cuts, but no agreement has been reached. Any change to the sequester would require enactment of explicit legislation modifying the BCA (P.L. 112-25). Congress is expected to consider this issue, along with expiring tax and other provisions, after the November 2012 election in a lame duck session. Increasingly, observers are expressing doubt that Congress will reach a deal on these items to avert the “fiscal cliff.”  

FFIS has updated its state-by-state estimates of potential spending reductions resulting from the sequester to reflect recent developments, including the latest funding information for fiscal year (FY) 2013 and a recent report from the Office of Management and Budget (OMB) on implementation of the sequester. FFIS estimates that states could see a -$7.5 billion funding reduction in FY 2013 for the programs in the FFIS database that are subject to sequester. However, most of the funding states receive via federal grants (82%) would be exempt from sequester.