As predicted, the Democrats' refusal to cut any spending other than the military only delayed the inevitable. Now, as is already taking place in Greece, France and Spain, deep cuts must take place or the government will shut down. The fiscal cliff agreement and the Budget Control Act of 2011 called for sequestration on March 1st if an agreement on how to pay down the deficit was not reached. The sequestration mandates $1.2 trillion in spending cuts across the board throughout most of the federal government over the next decade. The only way to prevent sequestration is if the Democrats and Republicans come up with a compromise this week, which could involve tax increases, agreed-upon cuts, or both.
Sequestration is nothing new, it first appeared in the Gramm-Rudman-Hollings Deficit Reduction Act of 1985. Yet Obama is using it to scare people and make the Republicans look bad. Obama falsely claims the sequestration was Congress's idea. PolitiFact.com analyzed that and other statements Obama has made about the sequestration and found them to be false or half-truths.
Obama wants to frighten Americans into believing the Republicans are about to shut down government again as happened in the 1990s. If sequestration takes place, he will claim that it could have been avoided if the Republicans had agreed to increase taxes. He is hoping that by declaring sky is falling scenarios, Congress will agree to pass tax hikes and avoid making some of the cuts. This would do nothing but postpone the problem again.