With no deal, cuts will start biting in 1st week of March

Defense Dept. will be among the hardest hit

President Obama


Even if President Obama manages to persuade Congress to raise new revenue, he has said he would replace only half of the spending cuts with tax increases, in essence accepting a half-trillion dollars in cuts over 10 years.

WASHINGTON — In the first week of March, a laid-off person living on $300 a week in unemployment benefits is liable to find a surprise in the mailbox: notification from Uncle Sam that come April the check will be $33 lighter.

Sequestration, that arcane budget term consuming Washington lately, is about to move from political abstraction to reality for millions of Americans. Barring an unlikely last-minute deal, about $85 billion is set to be cut from military, domestic, and certain health care programs beginning Friday.


Much of the government will be immune, only magnifying the cuts for the rest. If they are not reversed, federal spending at the discretion of Congress will eventually fall to a new five-decade low. Cuts of even larger size are scheduled to take effect every year over the next 10, signaling an era of government austerity.

By the end of this week, federal agencies will notify governors, private contractors, grant recipients, and other stakeholders of the dollars they would be about to lose. Nearly 2 million people who have been out of work for more than six months could see their unemployment payments drop by 11 percent in checks that arrive in late March or the first days of April, according to the White House budget office, an average of $132 a month. Doctors who treat Medicare patients will see cuts to their reimbursements.

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If the stalemate continues, furloughs and layoffs will probably begin in April, starting largely in the 800,000-member civilian workforce of the Defense Department and then rippling across the country, from meat inspectors in Iowa to teachers in rural New Mexico.

“If they hit me with a $3 million cut in March, I’m not sure what I’m going to do,’’ said Raymond R. Arsenault, the superintendent of the Gallup-McKinley County Schools, a sprawling district that serves primarily Navajo students on the Arizona-New Mexico border.

Arsenault’s school system would be hit much harder than most because 35 percent of his $100 million annual budget comes from federal education ‘‘impact aid’’ to offset the large tracts of land that are owned by Washington and therefore not subject to taxation. Of that, $3 million may disappear.


The sequester involves trimming $85 billion from a $3.6 trillion annual federal budget, or about 2.4 percent. But the cuts will not affect Social Security or Medicaid, and the Medicare cuts total only about $11 billion in the 2013 fiscal year, which ends Sept. 30, according to calculations by the Bipartisan Policy Center.

Thus, entitlement spending, which poses the biggest long-term challenge to the federal budget, accounts for only a sliver of the cuts. That leaves more than $70 billion in cuts to be applied over the next seven months to the roughly two-fifths of the budget that is devoted to discretionary spending, including the military, education, and other categories.

These cuts would probably not be confined to 2013. Even if President Obama manages to persuade Congress to raise new revenue, he has said he would replace only half of the spending cuts with tax increases, in essence accepting a half-trillion dollars in cuts over 10 years. That would be on top of more than $1 trillion in cuts already enacted by the Budget Control Act, which created the sequester in 2011 as part of a deal to raise the country’s statutory borrowing limit.

A comprehensive deficit-reduction deal, which is moribund but is still both Congress and the White House’s stated goal, might mitigate the impact by including fast-growing programs like Medicare and Medicaid in the cuts. But belt-tightening, for now, appears to be the new normal.

In private, Capitol Hill staff members and members of Congress have admitted that there are no viable plans on the horizon to delay or offset the cuts. At best, Congress might be able to pass a bill giving agencies more discretion in carrying out cuts. But that is opposed by the White House because officials fear that such a change would give lawmakers a false sense that they had done much to ease the pain of the cuts, when in fact, budget officials say, little would have changed.

That means that as of Friday, dozens of federal agencies must start bringing their budgets down .

The worst hit would be the Defense Department, which is already absorbing a $500 billion budget cut over 10 years agreed to in 2011 and is operating under a temporary spending agreement. Military personnel are exempted from furloughs, but civilian personnel are not, so the Pentagon is preparing to put civilian workers on notice that they might lose 22 days of work this year.

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