March 1 has arrived with little fanfare, but one thing is for certain: austerity is the new guiding force in Washington, D.C. Despite efforts by both political parties to reach agreement over the across-the-board spending cuts that some economists fear will plunge the U.S. economy back into recession, the budget reductions appear to be here to say. However, most folks don't quite understand how this process will play out over the next few weeks and months. It's actually a slow-building process that begins to accelerate significantly in the second half of the year.
First, the actual monetary cuts are implemented. According to ABC News, federal agencies have been quietly preparing for this eventuality for months. While the Obama administration has not issued guidance on an exact timeline, comments by top government officials suggest that the reductions will come first before any furlough notices will be issued.
The Wall Street Journal stated in a recent article that April will be the critical month for the sequestration effort. Federal administrators will presumably begin sending employees home on unpaid leave, although the duration of these furloughs is still unclear. Due to the complex nature of the U.S. government's contractor and sub-contractor chain of vendors, millions of workers could potentially be affected.
As harsh as sequestration appears at first glance, it represents just part of a slow-rolling fiscal challenge facing lawmakers and federal officials. Later this month, the Congressional continuing resolution, which is a substitute for a full budget, will expire. Unless the Obama administration and Congressional Republicans can reach an agreement, a government shutdown is possible.
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