Here are the Hefty Fiscal Cliff Automatic Spending Cuts

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While much of the fiscal cliff debate has focused on possible tax increases, failure to reach a deal to avert the cliff could bring massive automatic spending cuts.

Barring an agreement between U.S. President Barack Obama and Congress, $1.2 trillion of spending cuts over the coming decade would begin taking effect Jan. 2.

The automatic spending cuts, known as "sequestration" – a result of Congress's 2011 negotiations to raise the debt ceiling – would total $109 billion in 2013, CBS News reported.

Here's a closer look at where the cuts would be targeted.

The Fiscal Cliff Automatic Spending Cuts

The automatic spending cuts, which have been opposed by Democrats and Republicans alike, would be divided equally between defense and non-defense spending, CNN reported.

Let's start with defense programs, which represent about 20% of the federal budget and 50% of discretionary spending, which is set annually by Congress.

According to the Office of Management and Budget, discretionary defense spending would be cut by 9.4% to 10.0%, or about $55 billion, from a total of $580 billion.

Half of the defense cuts would be to overseas operations, weapons systems and procurement programs, but military personnel pay and benefits would not be reduced.

Non-defense discretionary programs, one of the smallest slices of the federal budget, would be reduced by 40%.

Democrats will seek to preserve these programs, which include international, aid, funding for NASA, national parks and the Environmental Protection Agency's toxic waste and water cleanup programs. States and cities would see education funding and community block grants cut, and spending for job-training programs, Section 8 and public housing, homeless shelters, law enforcement, Head Start and low-income heating assistance would also be cut.

Sequestration would also bring a 7.6% spending reduction for some entitlement programs, but benefits would not be cut. Cutbacks to Medicare providers would include a 2% reduction in payments to nurses, doctors and insurance plans.

Anne Stauffer, project director at the Pew Center on the States, told CNN about 18% of federal grant money that goes to states would be cut. The spending cuts could total $7.5 billion, and one area especially hard hit would be Title 1 spending for low-income students. Special education funding would be affected the most, and 200,000-plus children could be cut from the Head Start program.

So what's not going to be cut?

Most of Medicare, Medicaid, Social Security and the state Children's Health Insurance Program would be spared, as would food stamps, veterans' benefits and Pell Grants for college students.

If the automatic spending cuts do go into effect, experts believe it will harm the economy.

In fiscal 2013 alone, the Congressional Budget Office has estimated federal spending would decline $65 billion. This could take off two-thirds of 2013's projected economic growth and increase the unemployment rate as high as 1.5 percentage points, according to Steve Fuller, director of the Center for Regional Analysis at George Mason University.

Perhaps the prospect of the automatic spending cuts will provide impetus to reach a fiscal cliff agreement by year's end.

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Join the conversation. Click here to jump to comments…

  1. Mary | December 17, 2012

    It seems to me that going off the fiscal cliff means that now government jobs might be lost. Gee, what a shame. Private sector jobs have been suffering for a while now while federal, state, and all union employees have continued to enjoy their largely inflated and overcompensated salaries/benefits/pensions, mostly at ALL (even us who no longer have jobs and never had great coverage/pensions) taxpayers' expense. The private sector was forced off the cliff a while ago (their jobs/home losses caused largely by the government mismanagement) it seems the "Fiscal Cliff" is the result of the government's unintended consequences of mismanagement. I say, sever the right arm to keep the gangrene from spreading. Time to go off the cliff and then put Humpty Dumpty back together again.

  2. S | December 17, 2012

    This a** backwards country sickens me literally. I get section 8 and low income energy assistance. I need those to survive? I onky receive a measley $700 a month SSI. How is anyone supposed to live off of $700 a month without assustance. Yet no tax increase for the greedy wealthy. The $200 I get a year for energy assistance is less than pennies to the wealthy. And my Section 8 cut 40%. I count on that to pay my rent. Every last pebpnny goes to bills. Its dispicaple how the rich and powerful treat the disabled. May they rot in hell for even stressing me and others out about this. Makes me feel scared, hopeless and sucicidal. But thats what they want, for us to feel helpless. F them! Take your money, travel, buy whatever you want, do whatever you want while the rest of us cant even afford to leave out cages because we cant afford gas. You have no idea of the real suffering that goes on and if you met me, I bet you would be seriously surprised, you would NEVEr suspect I was poor, I could probably come off as one of them if I wanted. I am a human being, i have a heart and deserve better!

    • L Pourron | December 31, 2012

      Your on ssi that means you did not work and pay SS. so you want everyone else to pay your bills . Get a job

  3. S | December 17, 2012

    This a** backwards country sickens me literally. I get section 8 and low income energy assistance. I need those to survive? I onky receive a measley $700 a month SSI. How is anyone supposed to live off of $700 a month without assustance. Yet no tax increase for the greedy wealthy. The $200 I get a year for energy assistance is less than pennies to the wealthy. And my Section 8 cut 40%. I count on that to pay my rent. Every last penny goes to bills. Its dispicable how the rich and powerful treat the disabled. May they rot in hell for even stressing me and others out about this. Makes me feel scared, hopeless and sucicidal. But thats what they want, for us to feel helpless. F them! Take your money, travel, buy whatever you want, do whatever you want while the rest of us cant even afford to leave our cages because we cant afford gas. You have no idea of the real suffering that goes on and if you met me, I bet you would be seriously surprised, you would NEVEr suspect I was poor, I could probably come off as one of them if I wanted. I am a human being, i have a heart and deserve better!

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