The Ticket

Sequestration is coming. Now what?

Chris Moody
The Ticket

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President Barack Obama and House Speaker John Boehner (Win McNamee/Getty Images)

The Senate on Thursday voted to reject all proposals for an alternative deficit-reduction plan that would avoid sequestration, a process that will trim $85 billion in across-the-board spending from the federal budget this year.

Barring a sudden and unexpected outbreak of bipartisan cooperation (LOL) over the next 12 hours, most federal departments on Friday will begin the process of shaving about 2.5 percent from their projected budgets as part of the sequestration order. Over the next decade, if the policy remains in effect, the federal government will spend about $1.2 trillion less than projected, although spending will still increase over that time.

There has been a lot of noise coming from Washington about the consequences of the sequestration plan, which was originally voted into law in 2011 to encourage lawmakers to pass a "grand bargain" replacement that would achieve the same amount of deficit reduction.

The White House on Sunday released an alarming state-by-state breakdown of possible consequences if sequestration occurred. Hawaii Democratic Gov. Neil Abercrombie warned that Pearl Harbor would be less secure. California Democratic Rep. Maxine Waters cautioned that "over 170 million jobs" were at risk. (That would mean negative employment, considering there aren't even that many jobs right now in the U.S.) In all likelihood, sequestration will not be nearly as bad as advertised, something even President Barack Obama suggested on Wednesday night.

In seeking an alternative, lawmakers failed to bridge the divide between the Democrats' demand for more tax increases and the Republicans' insistence that the deficit be narrowed by cutting spending alone. On Thursday—one day before the deadline—Senate Majority Leader Harry Reid put a Republican bill and a Democratic bill on the floor to avoid sequestration. Both failed. (Even if the Republican version had passed, Obama had already vowed to veto it anyway. If the Democratic bill passed, the House would likely have rejected it.)

Washington has long known that this day would come. But instead of working in recent weeks to replace the across-the-board-style cuts with smarter methods of achieving some deficit reduction, the parties waged a public relations campaign against each other. Republicans focused on ensuring that Democrats took the blame for proposing the sequestration idea in the first place. Democrats worked to highlight the potential impact the cuts would have on federal services across the country, and accused Republicans of protecting tax loopholes for wealthy Americans at the expense of everyone else.

Regardless of who is really to blame, the deadline is here and sequestration will happen. What does that mean for most Americans? Actually, not much, at least in terms of effects people will immediately see and feel.

Yes, federal agencies will be forced to do more with a bit less. Over the past few months, everyone from Capitol Hill aides, military service members, federal workers and government contractors have been told to prepare for cuts. If you fall into any of those camps, Washington's inaction will likely have an effect on your bottom line. Civilian employees who work with the U.S. military may not secure as many contracts in the year ahead, for instance, and anyone who works under most federal agencies will be forced to prioritize their department's spending.

There are also plans to furlough workdays for some federal employees, so some can prepare for three-day weekends—but in return for less take-home pay. State and local government employees will also face budget hurdles as part of sequestration. State governments will have fewer federal dollars to subsidize local projects. Federal grants will become more competitive, and federal loans could become more scarce.

But here's the good news: Congress can vote at any time to replace the sequester with an alternative. The March 1 deadline merely sets the process into motion, and it will be gradual—perhaps so gradual that most people won't even notice.

As Obama put it this week, sequestration is “not a cliff, but it is a tumble downward.” There will be plenty of branches along the way for lawmakers to latch onto. The question is, how far will they let the country tumble before they finally grab one?

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