Sequestration Nation: What March 1 Really Means for the Economy – DailyFinance

Sequestration Nation: What March 1 Really Means for the Economy – DailyFinance.

With many of the world’s nations falling into economic disrepair and fighting to stay afloat, the United States may come to the same fate come March 1. President Obama and congressional Republicans have no progress to head off the $85 billion in automatic budget cuts that go into effect on Mar 1. Lacking a bipartisan deal to avoid catastrophe and hoping to put pressure on the GOP lawmakers, the administration revealed details about the cuts’ consequences including less secure U.S. embassies, trimmed defense contracts, and furloughed air traffic controllers. When a budget fight between President Clinton and congressional Republicans led to two government shutdowns in 1995 and 1996, some threats came true and others did not only because private groups stepping in and contractors working for IOUs. The budget impasse eventually ended before serious damage happened.

This time no government shutdown will occur but automatic cuts between March 1 and September 30 will occur which means a reduction of 13 percent for defense and 9 percent for other programs according to the budget office. These cut and $1 trillion over the next decade were put into place two years ago when the administration and Congressional bargainers made them so harsh that everyone would be forced to compromise. This has not happened. According to the administration letters and testimony to Congress social security, Medicaid, Medicare, and veterans’ benefits are exempted. The cuts will be made over a seven month period and do not all take effect March 1. If a deal is reached anytime during this period the money could be restore either some or all. However left in effect the impact is not clear yet for each program. The law limits administration’s flexibility to protect initiatives, but the White House told agencies to avoid cutting those that present risk to life, safety or health and minimize harm to crucial services. Every agency will experience some effects from these budget cuts if they go into effect.

According to AOL Daily Finance these are the tentative cuts according to the administration letters and testimony to Congress:

-Defense: Troops at war would be protected, but there’d be fewer Air Force flying hours, less training for some Army units and cuts in naval forces. A $3 billion cut in the military’s Tricare health care system could diminish elective care for military families and retirees. And, in a warning to the private defense industry, the Pentagon said it would be “restructuring contracts to reduce their scope and cost.”

-Health: The National Institutes of Health would lose $1.6 billion, trimming cancer research and drying up funds for hundreds of other research projects. Health departments would give 424,000 fewer tests for the AIDS virus. More than 373,000 people may not receive mental health services.

-Food and agriculture: About 600,000 low-income pregnant women and new mothers would lose food aid and nutrition education. Meat inspectors could be furloughed up to 15 days, shutting meatpacking plants intermittently and costing up to $10 billion in production losses.

-Homeland Security: Fewer border agents and facilities for detained illegal immigrants. Reduced Coast Guard air and sea operations, furloughed Secret Service agents and weakened efforts against cyberthreats to computer networks. The Federal Emergency Management Agency’s disaster relief fund would lose more than $1 billion.

-Education: Seventy thousand Head Start pupils would be removed from the prekindergarten program. Layoffs of 10,000 teachers and thousands of other staffers because of cuts in federal dollars that state and local governments use for schools. Cuts for programs for disabled and other special-needs students.

-Transportation: Most of the Federal Aviation Administration’s 47,000 employees would face furloughs, including air traffic controllers, for an average of 11 days.

-Environment: Diminished Environmental Protection Agency monitoring of oil spills, air pollution and hazardous waste. The color-coded air quality forecasting system that keeps schoolchildren and others inside on bad-air days would be curtailed or eliminated. New models of cars and trucks could take longer to reach consumers because the EPA couldn’t quickly validate that they meet emissions standards.

-State Department: Slow security improvements at overseas facilities, cuts in economic aid in Afghanistan and malaria control in Africa.

-Internal Revenue Service: Furloughed workers would reduce the IRS’ ability to review returns, detect fraud and answer taxpayers’ questions. It offered no specifics.

-FBI: Furloughs and a hiring freeze would have the equivalent impact of cutting 2,285 employees, including 775 agents. Every FBI employee would be furloughed 14 workdays.

-Interior Department: Hours and service would be trimmed at all 398 national parks, and up to 128 wildlife refuges could be shuttered. Oil, gas and coal development on public lands and offshore waters would be diminished because the agency would be less able to issue permits, conduct environmental reviews and inspect facilities.

-Labor: More than 3.8 million people jobless for six months or longer could see their unemployment benefits reduced by as much as 9.4 percent. Thousands of veterans would lose job counseling. Fewer Occupational Safety and Health Administration inspectors could mean 1,200 fewer visits to work sites. One million fewer people would get help finding or preparing for new jobs.

-NASA: Nearly $900 million in cuts, including funds to help private companies build capsules to send astronauts to the International Space Station.

-Housing: The Department of Housing and Urban Development said about 125,000 poor households could lose benefits from the agency’s Housing Choice Voucher program and risk becoming homeless.

IRS Delays Tax Season, Will Start Accepting Returns On January 30

IRS Delays Tax Season, Will Start Accepting Returns On January 30.

Unfortunately they did it anyway people. I can’t believe they would do this but luckily they only postponed it until the end of January when they will begin accepting them. The IRS says late changes to federal tax laws (remember the fiscal cliff people that we supposedly avoided) means that more than 120 million taxpayers – about 80 percent of all filers – should be able to start filing their federal returns on Jan. 30. Others will have to wait until late February or March to file because the agency needs time to update and test its systems. Don’t pain yet people here is a list of the people who will have to wait: people claiming residential energy credits, depreciation of property or general business credits. The filing season had been slated to start Jan. 22 but was delayed because of the big tax package passed by Congress Jan. 1. We did kind of avoid the fiscal cliff I guess but Obama and Congress still have caused people to delay their tax season plans. This should be a lesson to our leaders that what you do does actually have  a ripple effect.