BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  SJR 3
          Author:   Knight (R)
          Amended:  As introduced
          Vote:     21

           
          WITHOUT REFERENCE TO COMMITTEE OR FILE


           SUBJECT  :    Sequestration

           SOURCE  :     Author


           DIGEST  :    This resolution urges the President and Congress of  
          the United States to avert federal spending cuts known as  
          sequestration to, among other reasons, protect the California  
          and national economies.

           ANALYSIS  :     This resolution makes the following legislative  
          findings:

          1.The impact of a $1.2 trillion across-the-board, forced federal  
            spending cuts proposed under sequestration will have serious  
            and deleterious effects on our local, regional, state, and  
            national economies, and jeopardize hundreds of thousands of  
            high-wage, high-skill aerospace and other defense-related  
            jobs, nondefense jobs, and critical social service programs in  
            education, housing, health care, and other human service  
            programs throughout the nation.

          2.The sequestration spending cuts to over 1,000 government  
            programs would shrink defense and nondefense discretionary  
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            spending and be devastating to the California and national  
            economies.

          3.Due to our unique combination of geography, cutting edge  
            technological industries, and manufacturing capabilities,  
            California is second in the United States for federal defense  
            spending and provides vital services to our brave men and  
            women serving in uniform around the world, and a cut to the  
            defense budget would dramatically reduce the provision of  
            those services and risk the safety of our troops.

          4.Over 2.14 million jobs are projected to be lost in the United  
            States, including 225,464 jobs lost in California, if the  
            sequestration cuts are triggered.

          5.An estimated $215 billion reduction in the nation's gross  
            domestic product, including an almost $23 billion reduction in  
            California's gross state product are projected, if the  
            sequestration cuts are triggered.

          6.A long-term, bipartisan compromise that averts sequestration  
            will protect the California and national economies and provide  
            a balanced and thoughtful budget solution.

           Background
           

          The Budget Control Act of 2011 (BCA) established a 12-member  
          Joint Select Committee on Deficit Reduction (or "super  
          committee") charged with reducing the deficit by an additional  
          $1.2-$1.5 trillion over ten years.  The BCA also included a  
          sequestration hammer should the super committee fail, a  
          provision intended to "force" the super committee to act.



          Despite the threat of sequestration, the super committee failed.  
           Announcing its inability to reach an agreement on November 21,  
          2011, the members of the bipartisan committee stated that "after  
          months of hard work and intense deliberations, we have come to  
          the conclusion today that it will not be possible to make any  
          bipartisan agreement available to the public before the  
          committee's deadline."








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          Therefore, as established in the BCA, sequestration was  
          triggered when the super committee failed to reach an agreement.  
           Sequestration generates automatic cuts for each of nine years,  
          fiscal years 2013-21, totaling $1.2 trillion.  Sequestration was  
          originally scheduled to take effect on January 2, 2013.   
          However, it was delayed for two months, until March 1, 2013, by  
          the deal struck on New Year's Eve, called the American Taxpayer  
          Relief Act of 2012.



          Now, without Congressional action to prevent sequestration, the  
          first round of cuts will take place on March 1, 2013.

          The 2013 cuts apply to "discretionary" spending and are divided  
          between reductions to defense ($500 billion) and non-defense  
          ($700 billion).

           FISCAL EFFECT  :    Fiscal Com.:  No


          JA:nl  2/22/13   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  NONE RECEIVED

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