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Four Reasons The Next Budget Crisis Will Be Even Worse

Sequestration will likely go through as scheduled, meaning that Congress has not acted on the first of three "mini-cliffs" that resulted from January's fiscal cliff negotiation.

The next mini-cliff, scheduled to hit on March 27, will absolutely require action. If events in Congress remain at a stalemate, the effects for the U.S. could be devastating.

There are four major complications that make the March 27 mini-cliff even more perilous than the sequestration deadlock:

  1. The current continuing resolution — the bill that maintains the funding of the federal government in the absence of a new budget — is set to expire on March 27. Unless the GOP and the Democrats can come together to pass a new round of funding, the federal government will shut down.

  2. At the same time, Congress needs to deal with a second, smaller "little sequester." In a January 24 letter to colleagues, Senate Budget Committee Chairwoman Patty Murray explained that as a result of budget shuffling in the fiscal cliff deal, the security side of the budget is $7 billion over the Budget Control Act cap. Should Congress fail to act, the military will suffer a second sequestration one-eighth the size of the full 2013 sequester.

  3. Meanwhile, Congress will still be debating ways that the full sequestration can be adapted to give more authority to federal managers to implement the cuts in a smart manner. Because of the need for a new continuing resolution the "real" deadline for a sequestration fix is effectively March 27.

  4. Finally, the deadline is not actually March 27, because Congress has scheduled its two week Easter recess around that date anyway. The House leaves town on Thursday the 21st of March, and the Senate is only in session until the next day.

The March 27 mini-cliff has all the hallmarks of a perfect storm. Congress has to work on three separate fixes, all of which have a hard deadline. The last time this happened, the repair was a last-minute midnight fix on a national holiday to avoid a catastrophe.

Thanks to Congress' vacation, this leaves only 13 more days for the House — 17 more for the Senate — to avoid a government shut down and additional sequester budget cuts.

On top of that, it's worth remembering what the third mini-cliff on May 19 is: another debt ceiling fight.

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