By now you have probably heard the term, sequestration. Do you know what it's all about? Sequestration is a method adopted by Congress to insure Congress will reach a deal to reduce the deficit. The 'sequester" was passed last August when Congress reached an impasse on efforts to reduce the budget deficit. If an agreement is not worked out before December the “sequester” will trigger $1.2 trillion in automatic spending cuts, evenly split between defense and non-defense spending. The December date is the "fiscal cliff" we keep reading about in the paper. So what happens if Congress can't come together and agree on one trillion in budget cuts and a deficit reduction of one trillion? The NC Chamber recently heard a report from Scott Nystom with Regional Economic Model, Inc.(REMI) that painted a pretty bleak picture. In 2013, alone, sequestration will cut $54.7 billion from defense spending, $38.6 from non-defense and certain discretionary programs, and $16.1 billion from non-exempted and mandatory programs. Education funding will be subject to cuts ranging from 9.1% in 2013 to 5.5% in 2021, according to the Center on Budget and Policy Priorities.
According to REMI, it could cause the loss of between 2.8 and 3.2 million jobs over the next decade. While no state is safe, NC will be one of the top ten states hit the hardest for job loss. Additionally, no industry will be left unscathed, with professional and technical services being hit the hardest. The upcoming elections will make a big difference in Congress's ability to keep us from going over the "cliff". What can you do about it. - VOTE. If you want to learn more about the impact of the sequestration, click here and watch the video produced by the NC Chamber in which Jay Timmons, president and CEO of NAM; Will Austin, director of government affairs at Lord; and Lew Ebert, president and CEO of the NC Chamber, on sequestration’s impact on North Carolina manufacturers.
