Sequester becomes official as government shutdown averted
The House has approved a continuing resolution to fund the federal government until October, preserving wide-ranging budget cuts known as the sequester but preventing a shutdown. Layoffs and furloughs are next for some employees.
The price will be $85 billion in budget cuts at government agencies for the next six months. The sequestering of these funds became a reality on March 1, when Democrats and Republicans couldn’t agree on a compromise for the second half of the fiscal year, which started on October 1, 2012. The continuing resolution was a final chance to avert the sequester.
The continuing resolution will allow the defense department and some government agencies to cut specific programs and expenses, instead of using across-the-board cuts by a fixed percentage.
The bill includes detailed spending plans for the departments of Agriculture, Defense, Commerce, Homeland Security, Justice and Veterans Affairs; as well as for agencies like NASA.
But furloughs for most government-sector workers will become a reality. Food inspectors will be exempt as part of a last-minute deal.
The Washington Post said on Thursday that nearly 1 million furlough notices will be sent to government employees and private-sector employees paid with government funds. Included in that total are about 800,000 civilian employees who worked for the Defense Department.
Some employees could be forced to take off, without pay, for 22 days until October, effectively seeing a 20 percent pay cut for that period.
Pay raises for federal employees were also put on the back burner as part of the resolution.
A last-second attempt by Senator Jerry Moran to keep rural air traffic control towers open failed, as did an effort by Senator Tom Coburn to divert funds to restore White House tours.
The sequester cuts will also result in job losses for workers whose employers have contracts with the government.
On Tuesday, the Huffington Post detailed layoffs at employers ranging from Washington State to Pennsylvania that won’t be getting government funds.
How extensive the job losses will be is subject to debate. Last month, the Congressional Budget Office estimated that 750,000 jobs would be cut by the end of 2013 because of the sequester.
Private economists who spoke to Reuters estimated the job losses at about 300,000, with consumer spending taking a hit from furloughed workers making less money.
One expense that won’t be cut is congressional pay, which is protected by the 27th Amendment.
According to the Congressional Research Service, “Most exempt programs are mandatory, and include Social Security and Medicaid; refundable tax credits to individuals; and low-income programs such as the Children’s Health Insurance Program, Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, and Supplemental Security Income.”
Programs like Head Start will see cuts, as well as some unemployment compensation programs provided by the federal government.