My understanding of the sequester is as follows:
In the summer of 2011, we were approaching the debt ceiling. Democrats and the most reasonable Republicans agreed that it should be raised by enough to get us through the 2012 elections. Republicans were demanding deficit reduction as the price of their approval. All Democratic proposals to achieve the deficit reduction targets included tax increases. Republicans refused to accept any increases in taxes. Finally admitting to the urgency to raise the debt ceiling, Republicans and Democrats came up with a plan whereby they would raise the debt ceiling immediately and authorize a committee to craft the deficit reduction plan.
To provide incentives to the committee to compromise, the sequester was designed to cut programs indiscriminately that were favored equally by the left and the right. It was deliberately stupid and cruel to avoid its implementation. If Congress doesn't reduce the deficit by X amount in a given fiscal year, that amount is simply sequestered.
The CBO just revised this years deficit projection down by $200 billion which far exceeds the sequester's requirement for this year. Why is it still in effect for the remainder of the year? Shouldn't every year affected by the sequester get relief for any deficit reduction that exceeds the amount required for that year?