US Citizens Braced for Austerity Impact

Getty Images

From long delays at the nation's airports to huge potential lay-offs of government workers to less accurate weather forecasts, Americans may soon feel the pinch of austerity.

Despite political maneuvering by Republicans and the White House to find a solution to the so-called "sequester", there are no serious proposals to avoid the $1.2 trillion in automatic spending cuts that are expected to take effect on March 1.

What happens next is the subject of intense speculation on Capitol Hill. This is in part because the Obama administration has kept a lid on the details of how US government agencies would absorb $600 billion in spending cuts during the next decade and exactly which programs the Pentagon would slash to accomplish an extra $600 billion reduction.

(Read More: Senate Republicans Seek 7-Month Delay in Spending Cuts)

"Will the average person feel these cuts in a way that they will show some outrage or will they just go on and be kind of 'ho hum'. No one knows how this plays out," says Tom Davis, a former Republican congressman from Virginia.

"Virginia is going to be hit hard [because of its reliance on the defense industry], but if you are sitting out in Oshkosh, Wisconsin, they are saying 'it's about time'."

Budget experts describe a dire picture of the sequester's effect on economic activity and everyday life.

The most immediate impact would be likely to be felt by government workers. The Pentagon has said that 800,000 civilian employees would see their hours cut by 20 percent for the rest of the year and 46,000 temporary workers would be laid off.

Other agencies would also see deep cuts in staff. There are estimates of a 25 percent drop in border patrol agents, 600 fewer food safety inspectors at slaughterhouses and meat processing plants, and 1,200 fewer air traffic control operators.

"No one knows for sure what the impact is going to be. A great fear we have is that travel is the place we see the sequester up close and personal," says Geoff Freeman, executive vice-president of the US Travel Association, a lobby group that supports tourism.

More From The Financial Times:

US Budget Cuts Hit Aircraft Carriers

US Budget Deficit Expected to Shrink

US Budget: The Battles Ahead

The association's chief concern is that the expected 5 percent decrease in 2013 budgets would immediately affect overtime staff at airports, who it argues are critical in peak travel periods. Cutbacks could increase waiting times for international travelers entering the US, it says.

Kip Hawley, a former administrator for the Transportation Security Administration, which handles airport security, said the TSA could handle cuts for a month or two before it would become unsustainable or force a rethink on how to enforce security measures. This could include phasing out rules, such as keeping some sharp objects off planes, that are not necessarily critical for safety and take up tremendous manpower.

(Read More: Republicans Start New Congress Bruised and Divided)

Research advocates have argued that cuts to the National Institutes of Health, which drive US medical research, will slash about $12.5 billion from research this year and reduce economic growth by up to $860 billion over nine years, hitting US competitiveness in science in the long run and triggering nearly half a million job losses between 2013 and 2016.

Even the ability to predict weather could be affected. According to Third Way, a centerground think-tank, the sequester would drastically cut funding for a new polar-orbiting satellite that will be needed in 2016, in effect slowing improvements in long-term weather forecasts for potentially catastrophic events such as hurricanes and tornadoes.

Some analysts predict that the sequester would quickly become politically unsustainable. The cuts will eat into government services, according to some theories, and put pressure on legislators to act. But there are cross-currents that also make changes to the sequester unlikely. Conservative Republicans who are pushing for smaller government see the sequester as a tangible result of their pressure to address US deficits.

(Read More: Obama Questions 'Carried Interest' Tax Break)

"Republicans would lose all credibility [if they relent on the sequester]. That money is in the bank as far as they are concerned," says Mr Davis.

Opponents of budget cuts argue that federal budgets are already under intense pressure. According to the Center for American Progress, a liberal think-tank, federal funding for government programs and services has never fallen below 3.2 percent of GDP during the past 50 years.

But today, given cuts that have already been implemented, that non-defense spending will be 14 percent lower than it has been at its lowest point in the past 50 years, even before taking the sequester into account.

According to a recent report by CAP, spending is expected this fiscal year to be about $47 billion lower than the Congressional Budget Office had projected in August 2010, a cut of slightly more than 7 percent. But by 2022, the cuts will have grown to $95 billion annually or 12 less than projected in the budget office's 2010 estimate.