Let's cut through the sequester clutter talk. In simplest terms it means this: This year's federal operating budget was going to get the normal percentage increase. It is a portion of that "raise" that will be seeing the cuts.
As someone somewhere explained, "your parents promised to raise your allowance for 2013, they now have to cut a part of that raise." So in reality things should just go along as they have been going unless each organization or department added the full raise into their own budgets for this year.
Now the administration has begun to back off all its dire predictions of what the sequester would mean. We aren't doomed, we are just not capable of eliminating stupid spending.