GO
Loading...

Are You Ready for the Pain of Sequestration?

Friday, 22 Feb 2013 | 12:25 PM ET
Daniel Acker | Bloomberg | Getty Images

Dire predictions over sequestration — the mandatory budget cuts scheduled to begin next Friday — are plentiful to say the least.

From massive job losses, to cuts in major government services like defense as well as social programs, and the likely return of a recession, there's no shortage of disaster ahead, according to government officials and economic analysts from the president on down.

Some cuts would be phased in over time, and other programs like Social Security and Medicare, are exempt from sequestration.

Most government agencies have funds available after March 1, but the clock would be ticking on how long they can keep operating. One of the biggest problems from the cuts is the number of government workers placed on furloughs or laid off.

So if Congress and President Barack Obama can't reach a deal to avoid sequestration, where would most people feel the immediate pain? How would it affect every day life? (Read More: Critical Differences Belie Hopes for a Grand Bargain)

Here's a look at some of the areas where sequestration could immediately impact most Americans, according to a congressional report.

FAA's LaHood Urges Congress to Reach a Deal
FAA head Ray LaHood said airline traffic will be hit by government spending cuts, in an effort to urge Congress to reach a deal by March 1, reports CNBC's John Harwood; and Phil LeBeau is watching Boeing's stock. Mary Schiavo, Motly Rice aviation disaster attorney, and Jason Gursky of Citi, offer insight.

Transportation: Long lines at airports, fewer traffic controllers, higher ticket prices

The Transportation Security Administration (TSA), the agency that handles airport security, would be forced to reduce its workforce, including a seven-day furlough for screeners, which would increase passenger wait times at most of the nation's airports by more than an hour. (Watch the video of Transportation Secretary Ray LaHood on what could happen)

Also adding to the burden would be furloughs in the workforce of the Federal Aviation Administration, which means fewer air traffic controllers on the job. That means reduced air travel, longer delays for passengers. As much as 10 percent of the FAA's workforce of 40,000 would be on furlough on any given day.

It could also mean higher ticket prices for passengers as the weeks went by, as the FAA depends on a trust fund for its money and that funding comes from taxes on air traffic. So, as fewer goods and people travel, the amount in the fund goes down and it will need to be replenished.

Social Security: Claim delays, offices closed

Even though sequestration does not cut funding for Social Security, it does mean that the Social Security Administration would have to furlough workers for ten days or more. That would likely delay the processing of retirement and disability claims and a smaller staff would mean offices would be closed early or permanently, resulting in longer wait times for service. Social Security checks are still expected to be mailed.

Internal Revenue Service: Rough time for tax filers, identity theft rise

Here again, furloughs for IRS workers up to ten days or more would come into play, just as the 2012 tax filing season begins. IRS call centers are expected to close or have long hold times. There will be fewer enforcement agents available to investigate fraud claims, which could result in a greater number of identity theft cases unsolved--one of the biggest issues facing IRS agents and tax payers.

And the government would lose money, increasing the debt. Each dollar invested in enforcement actions returns $4 in additional revenue to the Treasury. Cutting investment in enforcement will lead directly to an increase in the deficit

Food safety and Inspection: Possible food shortages, industry worker layoffs

Like other government programs the Food Safety and Inspection Service would have to furlough thousands of workers. The FSIS regulates meats, poultry and egg products and inspects all food products coming into the U.S. from abroad. Plants are not allowed to operate without inspectors so the plants would be forced to close early or shut down, slowing the food supply to grocery stores and restaurants. Also, workers at the food plants as well as grocery stores and restaurants will face layoffs themselves.

National Parks: Stay home, they're likely closed

Furloughs and layoff could limit hours or close down most of the nation's national parks, just as the spring and summer days bring in most visitors. (Read More: Automatic Spending Cuts Threaten National Parks)

A January memo from the National Park Service states that nearly $110 million would have to be immediately eliminated from the park services' $2.2 billion budget .Among the parks facing the most severe cuts are Yellowstone, Yosemite, the National Mall and Memorial Park in Washington, D.C., the Grand Canyon, the Everglades, the Great Smoky Mountains and Mount Rushmore.

Health: No more patients

Because federal funds support many health centers across the country, they would be cut off from some $120 million due to sequestration. That could mean up to a million patients will not get care, because there would likely be a limited or no medical staff to attend to them.

The Rest: A steady decline in government services

Other major programs facing cuts and furloughs include the Coast Guard, the Border Patrol, the Food and Drug Administration, the National Institutes of Health, elementary and secondary education, student loan programs, the Federal Bureau of Prisons, the Department of Justice, the Secret Service, the Securities and Exchange Commission, the Centers for Disease Control, the National Aeronautics and Space Administration, the National Science Foundation, the National Cybersecurity Protection System and of course all major governmental departments, including the Department of Defense which must cut up to $500 billion of its budget in the next 10 years.

Featured

Contact Economy

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More