Define 'Sequestration' in budgetary terms.

Prepare for the Society of Defense Financial Management Exam. Study with flashcards and multiple choice questions, each question has hints and explanations. Ready yourself for your exam!

In budgetary terms, 'sequestration' refers specifically to a process that automatically reduces spending in federal programs. This mechanism was implemented to enforce budget discipline and control spending, particularly after periods of fiscal irresponsibility. Sequestration typically involves across-the-board cuts to discretionary spending, which affects various programs without the need for active legislative action each time a spending limit is exceeded.

This automatic reduction is designed to address budget deficits and ensure that federal spending remains within set parameters. The intent behind sequestration is to create a more disciplined fiscal environment by mandating reductions, thereby compelling agencies to operate more efficiently within their available resources.

In contrast, strategies for increasing military funding or allocating additional resources do not align with the concept of sequestration, as these imply enhancing rather than reducing financial commitments. Similarly, evaluating program efficiency does not fit the definition of sequestration, as this process is more about financial cuts than about assessing how effectively resources are being utilized.

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