Niraj Chokshi | March 5, 2013
Under a deal to raise the legal limit on the government's borrowing in August 2011, lawmakers agreed to roughly $1 trillion in spending cuts over the next decade and set up a process to find at least $1.2 trillion in further savings. Under that deal, known as the Budget Control Act, a "supercommittee" was established to try to hammer out an agreement on long-term budget savings. The committee folded in 2011 without an agreement on deficit reduction, setting the stage for automatic cuts to mostly discretionary programs totaling $1.2 trillion to kick in starting in 2013. The cuts, known as sequestration, apply to both domestic programs and defense spending.
