Overview

• The CBO analysis specifies that OMB must issue a sequestration order within 14 days after Congress adjourns to cut $415 billion from fiscal 2026 spending under the Pay-As-You-Go law.
• Medicare reductions are capped at 4 percent annually, translating to roughly $45 billion in 2026 and rising to $76 billion by 2034, with $491 billion in cuts projected for 2027–2034.
• Including fiscal 2026, cumulative Medicare reductions would exceed $500 billion, forcing deeper across-the-board cuts to other direct spending accounts.
• Democrats urged bipartisan legislation to offset the tax-and-spending package’s deficit effects, while House Republicans defended its growth claims and highlighted $50 billion in rural hospital funding.
• Sequestration has never been triggered under the 2010 law, and lawmakers now face a narrow window to enact offsets and prevent automatic cuts.