November 21, 2011

Sequestration in Perspective: Debt Without and With Sequestration

Key materials

This week, Mercatus Center Research Fellow Veronique de Rugy places the Budget Control Act’s sequester into perspective by illustrating the effect of sequestration on public debt. This chart uses data from the Congressional Budget Office’s (CBO) debt baseline projections and CBO’s recent report on the sequester over fiscal years 2012 to 2021.

The automatic sequester cuts do very little to the overall trend in the growth of debt. In the next ten years, CBO projects that under current law, public debt will reach nearly $14.54 trillion by 2021. In contrast, debt with sequestration shows a rather minute difference of $153 billion, in the $14.38 trillion debt estimate by 2021.

The United States was downgraded by S&P in August for failing to take the necessary steps to change our financial path. The sequestration cuts won’t change much unfortunately.

Veronique de Rugy shows how sequestration increases spending by $1.65 trillion between 2012-2021 in a recent Mercatus Center publication.