What will sequestration do to stock market




















The specter of harmful across-the-board cuts to defense and non-defense programs — as part of the fiscal cliff — was intended to drive both sides to compromise.

But so far, no deal. Which programs will be hit by sequestration? Here's a quick look at some of them. The DoD would be able to shift funds "to ensure war fighting and critical military readiness capabilities were not degraded," but non-deployed units, equipment and facilities, and research and development efforts would all take a hit.

The cuts would affect all sorts of programs, according to the DoD, including research and development as well as cause a reduction in the number of government contracts awarded. About , defense civilian employees could lose their jobs in if sequestration takes effect, according to a report by the Center for Strategic and Budgetary Assessments. 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.

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, 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. Here again, furloughs for IRS workers up to ten days or more would come into play, just as the 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. Cutting investment in enforcement will lead directly to an increase in the deficit.

Food safety and Inspection: Possible food shortages, industry worker layoffs. On DoD. Defense Industry. Agency Oversight. Open Season. Mike Causey. Tom Temin. Accelerating Government. Ask the CIO Podcasts. Business of Government Hour. Every Side of Cyber. Federal Drive.

Federal Executive Forum. Federal Newscast. Federal Tech Talk. For Your Benefit. Innovation in Government. Modern Government. On DoD Podcasts. Platform for the Mission. Search for Accountability. Security Clearance Insecurity. The Space Hour. Your Turn. More Audio Shows. Federal Insights. Executive Briefings. Industry Analysis.

The BCA sets targets for deficit reduction and caps on the increase in federal spending in each year from to If spending exceeds these caps, the government is supposed to limit planned increases in spending by a percentage determined as laid out by the law. In practice, most federal spending is exempt or otherwise not subject to limit by sequestration as Congress continually raises its own spending caps and legally exempts new categories of spending.

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Learn About the European Sovereign Debt Crisis The European debt crisis refers to the struggle faced by Eurozone countries in paying off debts they had accumulated over decades.

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