Officials: Sequester cuts would ripple through economy

Posted: Feb. 26, 2013 8:45 am Updated: Mar. 19, 2013 12:15 pm

Herald-Whig Senior Writer

LIMA, Ill. -- Audene Schrader knows that most of the talk about $85 billion in federal agency cuts is playing out in Washington D.C., but she's worried what it will mean in Western Illinois and communities across the nation.

"They have frozen a lot of salaries and say they're going to cut the number of workers. It just isn't good," Schrader said.

A retired U.S. Postal Service worker, Schrader is president of the West-Central Illinois chapter of the National Active and Retired Federal Employees. She knows from talking with other NARFE members that federal agencies already have cut their staffing. The sequester cuts -- scheduled to take effect Friday -- will compound problems within those offices and in the larger economy, she said.

"It causes a ripple effect. There's less money to spend in the community ... it uproots families, it hits housing and everything else in the economy," Schrader said.

President Barack Obama said the uncertainty of government cuts already has a chilling effect on the private sector.

"Companies are preparing layoff notices. Families are preparing to cut back on expenses. The longer these cuts are in place, the bigger the impact will become," Obama said.

There was no indication the White House and congressional Republicans were actively negotiating a deal to avoid this week's deadline that will trigger cuts.

U.S. Rep. Sam Graves, R-Tarkio, Mo., said the president is using "fearmonger campaign tactics" and overblowing the negative impact.

"A 2.5 percent cut to the federal government can be absorbed as long as all options are considered and the approach is thoughtful," Graves said.

"Government spending has gotten out of control and cuts are necessary to keep our debt in check. However, the president should be taking a more thoughtful approach to these cuts. Targeting programs that are wasteful, duplicative, and fraudulent would be the logical place to start."

U.S. Sen. Dick Durbin, D-Ill., said the nation's struggling economy will be hurt if agency spending is slashed by the amounts outlined. He also thinks it will put the nation's military at a disadvantage.

"Sequestration is an economic challenge as much as a military one, and it will punish most the people who can least withstand it," Durbin said.

"Few of my colleagues in either party want to see sequestration go through, and Senate Democrats have developed a plan to avoid it. We'll be voting on that plan in a matter of days. I intend to do everything I can to keep these cuts from happening, and to give our Armed Forces the support they need to keep functioning at the highest level."

About 2 million long-term unemployed people could see checks now averaging $300 a week reduced by about $30. There could also be reductions in federal payments that subsidize clean energy, school construction and state and local public works projects. Low-income Americans seeking heating assistance or housing or other aid might encounter longer waits.

Government employees could get furlough notices as early as next week, though cuts in their work hours won't occur until April.

Schrader has seen the turmoil in the Postal Service with cuts made according to bureaucrat's timetables, rather than conditions in offices and communities.

"The people that are making the decision have never worked in any of these departments," Schrader said.


The Associated Press provided information for this story.