This is the Cato Daily Podcast for Tuesday, June 5th, 2012. I'm Caleb Brown.

Congress tried to tie its own hands last year. They had to cut projected spending or an automatic

sequester would do it for them. Well, they failed to cut spending. Now Republicans

want out of the sequester deal arguing that war spending doesn't really count as spending and

shouldn't be subject to fiscal constraints. Ben Friedman, a research

fellow in defense and homeland security studies at the Cato Institute, says it's all spending.

The President and Congress are having this sort of, I guess, battle of wills and political positioning over

sequester created by the budget plan that they passed last year and it's funny the way it's coming down. There's a

distinction that we need to draw between the military budget and so-called

overseas contingency operations and OCO is sort of the subject of this fight.

Yeah, the Budget Control Act passed in the summer of 2011, so almost a year ago now, it has two forms of sequester. It says number one if the joint committee, which the bill created to try to solve the deficit problem and save a bunch of money failed, which it now has to be a

sequester that takes place in January 2013, which takes money from across the board regardless of what the budget is for that year.

So, and because the joint committee has failed, that's now scheduled to happen and that would take about $500 billion, about $55 billion from the Department of Defense in the next fiscal

year.

Then the bill also says we're going to set caps for all the subsequent

fiscal years until 2021 and if you go over those caps and spending they'll be sequestered to get you back down to the

amount that the cap is.

So there's two kinds of sequesters in this bill and the question is, do wars count?

Will they be sequestered?

Will the funds for the wars, the overseas contingency operations be included?

And a lot of people thought no, because the bill says

the wars don't count towards the total in the cap so

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