What is Sequestration? - A procedure of fiscal policy adopted by Congress as a part of the Fiscal Cliff that deals with the federal budget deficit. It forces automatic cutbacks in spending on government programs such as defense and education, then uses that money to reduce the deficit. In 2013, sequestration will automatically cut about $55 billion in defense spending and about $55 billion in non-defense spending and over the following 10 years, will cut a total of about $1.2 trillion.
The word first appeared in the Gramm-Rudman-Hollings Deficit Reduction Act of 1985, which enacted similar spending cuts if the deficit grew past a set level.