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Economy Facing Uncertain Future if Sequester Shrinks Budgets

Federal agencies will have fewer funds beginning Friday if Republicans and Democrats can’t avoid the sequester deadline.

A political deal struck in the summer of 2011 will begin to affect the economy in late winter 2013, unless feuding lawmakers in Washington can agree on a compromise by Friday.

The sequester will mandate significant cuts to the federal budget, with few if any government agencies immune to reductions in funding. Defense and domestic spending will be evenly slashed, and the impacts on local economies are far from clear.

Orange County has more than 20,000 federal employees and retirees, according to Eye on Washington, and their fate could include furloughs or worse. Media reports include warnings on delays in air travel and tax refunds.   

Civilians employed by the Department of Defense face the possibility of furloughs.

“The possibility exists for a 22-day furlough of Federal employees,” said Brian O’Rourke, spokesman for Navy Region Southwest.

The Obama administration released on Sunday a report for each state detailing the impacts of the sequester’s budget cuts, and Republicans have accused the president of using scare tactics for political gain.

The seven-page report for California paints a grim picture for education, environmental protections, the military, law enforcement, child care, public health and government services. The report is attached to this article in the PDF section.

The nation has been through this drill before. The sequester was set to begin on Jan. 1, 2013, if lawmakers weren’t able to reduce the budget deficit. That deadline came and went, but they were able to agree on postponing the sequester for two months. That time is running out.

Earick Ward February 27, 2013 at 02:43 PM
Significant cuts? Grim picture for education, environmental protections, the military, law enforcement, child care, public health, and government services? You're joking right? The sequester is targeted to cut $44B on $3.5T in spending. An increase BTw, not decrease from last year. Of course, Dear Leader can direct as painful cuts as he deems political beneficial.
Earick Ward February 27, 2013 at 04:35 PM
What would be the prescription for a household, that consistently spent 40% more than it earned? The Baseline Budget Act of 1974 demands that Government increase spending at least 8% per year, across the board. The merit of a particular department, or project within a department is not evaluated, as part of the increase. If we cannot cut 3%, on a $1.2T annual deficit, we are doomed!

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