The White House and Republicans are trading blame over massive spending cuts scheduled to take effect on Friday and an agreement to head off the reductions looks increasingly unlikely. How the $85 billion reduction will be implemented depends on a lot of factors, some of which aren’t yet clear. What is clear is that the spending cuts are broad, bad for states, bad for business, bad for the economy, and bad for a lot of people.
If you like to fly, are an educator, have kids in school, work for the federal government, are poor, or simply participate in the economy (aka anyone), sequestration could impact your life.
The cuts could cost nearly 750,000 jobs by the end of the year, according to the nonpartisan Congressional Budget Office. No one expects sequestration to stay in place for long, though—the effects are just too severe for lawmakers to do nothing about them. And the immediate impact of the cuts is overhyped.
But here’s how sequestration would affect your life if Congress doesn't act quickly to undo it, starting with some background. (Scroll down to skip to the human impact.)
What is sequestration?
Sequestration is $1.2 trillion in automatic spending cuts due to go into effect over the next 10 years, with roughly $85 billion slated for this year. Make no mistake, a lot of people in both parties want to cut spending. The reason so many people hate sequestration, though, is that agencies and departments don’t have any input on how it goes into effect—the spending cuts are implemented across the board.
Whose idea was it anyway?
It’s been widely reported that the idea for sequestration came from Jack Lew, who was Obama’s budget director at the time and went on to become his chief of staff and is now his Treasury secretary nominee. But to stop there misses the point, many argue.
(J. Scott Applewhite/AP Photo)
Sequestration was put into effect as part of the Budget Control Act of 2011. Both parties had already agreed to about $1 trillion in cuts but couldn’t agree on what to do next to get the nation's fiscal house in order. They were also desperate to raise the national borrowing limit to prevent a default—an occurrence that would arguably inflict more damage than sequestration. To achieve both goals—raising the borrowing limit and improving the nation’s fiscal standing—they borrowed from a Reagan-era law.
The idea was simple: Schedule automatic cuts for the future that were so harmful to everybody that Congress would be compelled to implement better, smarter cuts before they hit. Sequestration was initially scheduled for the start of the year. Lawmakers delayed it then, but it now seems unlikely that anything will be done before it goes into effect on March 1 (although it could be addressed retroactively).
OK, So how will it affect me?
Sequestration could affect you if you fit any of the following profiles.
Ms. Defense Department Employee
Do you work for the Pentagon? If so, you may be one of 800,000 civilian employees who face possible unpaid leave after sequestration goes into effect. “There is no mistaking that the rigid nature of the cuts forced upon this department, and their scale, will result in a serious erosion of readiness across the force,” Defense Secretary Leon Panetta told employees in a memo last week.
(Tech. Sgt. Andy Dunaway, U.S. Air Force/Defense Department photo)
Mr. Airline Passenger
Are you a fan of flying? Well, if nothing is done, airline passengers could start seeing meaningful delays by April 1 under sequestration. That’s because the Federal Aviation Administration, which is facing $600 million in cuts, may have to start furloughing thousands of employees, Transportation Secretary and former Republican lawmaker Ray Lahood said on Friday. The cuts could also lead to the closing of hundreds of air traffic control towers, making it harder for planes to land and take off.
(Nam Y. Huh/AP Photo)
Ms. Jane Q. Public and little Jonny Doe
Are you a woman (or infant or child) who receives assistance through the government’s Women, Infants and Children program? If so, you may become one of the 600,000 dropped from the program after sequestration goes into effect. The federal Head Start program, which seeks to prepare young low-income children for school, also faces cuts. Up to 70,000 of those kids could lose access to the program, according to Health and Human Services Secretary Kathleen Sebelius.
(Pat Christman/AP Photo)
Are you a military veteran or a dependent of an active service member? If you are and rely on the military’s Tricare health insurance program, your benefits could be affected. The program faces a possible $3 billion shortfall under sequestration and, as The New York Times’ editorial board put it, “could lead to denial of elective medical care” for those two groups.
If you’re an educator your job might be affected by sequestration. The White House on Sunday outlined how sequestration could affect individuals in each state. Nationwide, 10,000 teachers and 7,200 special education teachers, aides, and other staff could be dropped as a result of cuts to federal spending on local education.The Huffington Post made a handy chart depicting the state-by-state data:
Do you love the outdoors? Hope you like garbage. And bears. Park administrators in Yosemite National Park say the coming spending cuts could lead to less trash collection, which could lead to more bears at campgrounds. The Cape Cod National Seashore plans to shutter a visitor center, the Great Smoky Mountains National Park will close five campgrounds. The way each park will deal with sequestration varies, according to Time magazine, but there is one constant: It’s going to affect the visitor experience.
Mr. Economic Participant
You don’t need to be in any of the above categories to feel the impact of sequestration. You simply have to be a participant in the economy. (Which you are if you have a job or spend money on things.) That’s because sequestration would slow down economic economic growth, according to various projections. And economic growth has a far-ranging impact on everything from how much consumers spend to how much businesses hire and invest. Of course, it’s highly unlikely lawmakers will let things get to that point. Then again, sequestration was never expected to go into effect in the first place.