The Pentagon © Digital Vision., Photodisc, Getty Images

Not long ago, the nation was transfixed by $85 billion of looming, across-the-board cuts in federal spending that President Obama and many others predicted would tank the economy, undermine defense and force drastic cuts in government programs and personnel.

Those automatic cuts, or sequestration, are still chipping away at the government's discretionary spending on defense and domestic programs, but they have been largely eclipsed by the government shutdown and threat of a first-ever default on the U.S. debt.

The cuts forced widespread furloughs of federal workers before the shutdown, prompted billions of dollars in cuts in Defense Department weapons contracts, and sharply curtailed government services and programs to average Americans. Those reliant upon federally funded programs like Head Start, Meals on Wheels and housing assistance all have felt the bite of sequestration.

Just last month, the Department of Health and Human Services announced that the Head Start program, which provides services like meals, transportation and medical care for low-income, preschool-aged children, had cut services for more than 57,000 children. The $8 billion budget for Head Start has already been slashed by 5.27 percent, and it's likely to absorb even more cuts if the second wave of sequestration takes effect.

While the cuts pose increased hardships for the poor earning less than $30,000 a year, 74 percent of Americans recently surveyed by the United Technologies/National Journal Congressional Connection Poll said they have not noticed any effects of the sequester cuts that took effect in March.

The backstory

The sequester was designed during the 2011 debt-ceiling negotiations as a poison pill that no one thought would ever take effect. The idea was that mindless, across-the-board cuts would be so unappealing that Washington lawmakers would be motivated to replace them with new and less-disruptive reductions. The goal of the 2011 Budget Control Act was to achieve about $2.5 trillion of savings over the coming decade by meeting strict spending caps that would gradually constrict the budget.

But when a "super committee" of House and Senate Republican and Democratic leaders subsequently failed to agree on about $1.5 trillion of those overall savings, the first installment of the automatic cuts began to kick in last March.

The early assessments of the first-year impact of these automatic cuts have been highly mixed. Many conservatives who once opposed sequestration because of its adverse impact on defense programs now are singing its praises because of its enforced savings.

There are some indications that the sequester reigns as the only real budget discipline in Washington. Total federal outlays are down from a high of $3.6 trillion in fiscal 2011 to an estimated $3.45 trillion in the 2013 fiscal year that ends on September 30. Assuming no recession and adherence to the caps, federal expenditures will continue to shrink as a share of the economy over the remainder of the Obama presidency.

"Sequester is the best political leverage Republicans have to gain a concession from Democrats—on Obamacare or anything else," the Wall Street Journal's conservative editorial page wrote recently. "The ever-tighter spending caps on domestic discretionary spending are squeezing the liberal constituencies that live off government. As the likes of Planned Parenthood and welfare and other transfer payments get squeezed, the political pressure increases on Democrats to give up something tangible in return for easing the caps.

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The federal government tightened its belt to the tune of $85.5 billion in the fiscal year that ended September 30, and will cut another $100 billion in the coming year unless Republicans and Democrats agree to blunt or alter the impact of the sequester as part of a larger budget deal to end the government shutdown and debt crisis.

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