Sequestration will start next January and reduce discretionary spending by 12.1 percent in fiscal year 2013 if Congress does not reverse the Budget Control Act, FierceGovernment IT reports.
Across-the-board cuts will affect mandatory programs such as Medicare but discretionary spending will see the largest year-over-year percentage drop, according to a Congressional Research Service report.
The budget act could reduce overall discretionary spending to the lowest share of gross domestic product since 1962 when the data was first kept track of, the report said.
Discretionary spending was reduced in largely similar ways at the ends of the Vietnam and Cold Wars, according to the CRS.
Some mandatory programs such Department of Veterans Affairs spending, are not subject to sequester cuts.
Other programs such as Medicare will face the cuts and Medicare is set to receive a $6 billion automatic cut in fiscal 2013.
The CRS said that despite the cuts, programs deemed mandatory spending will actually see an increase in spending under the budget act.
This will result in overall federal spending as a percentage of gross domestic product to be above what it was following World War II by 2012’s end, the report said.