A survey released Monday by the National Association for Business Economics found that 60 percent of economists polled now expect “sequestration,” which will slice about $85 billion from the federal budget, to begin March 1 in full or partial form.The survey of 49 professional economists, representing industry, government and universities, indicates experts don’t see a recession scenario as a result of the cuts.More than half predicted that the effects of sequestration and other budget uncertainties would shave economic growth by less than half a percentage point this year. Another third said the pain would be greater, with real Gross Domestic Product, or total economic output, sliced by up to a full percentage point.Either way, that’s not a small number given the mediocre pace of GDP growth since the Great Recession of a little more than 2 percent on average. Source: Tribune Co.
The White House on Monday ramped up its call for Congress to act on the looming sequestration budget cuts by releasing a state-by-state analysis of how the cuts would hit home.
Teachers and schools: State will lose $12.5 million for primary and secondary education, putting 170 teacher and aide jobs at risk.Children with disabilities: Lose $8.6 million for 100 teachers, aides and staff.Work-study jobs: 830 fewer low-income students would receive aid to help finance college, and around 270 will not get work-study jobs that help them pay for college.Head Start and Early Head Start: Services eliminated for 900 children in S.C.Clean Air/Water: S.C. to lose $1.7 million in environmental funding covering clean air and water and to prevent pollution from pesticides and other waste. Could lose funding for fish and wildlife protection.Military: 11,000 civilian Defense Department employees facing furloughs, reducing gross pay by around $59.5 million total.Army: Base operation funding cut by $62 million.Air Force: Funding for Air Force operations cut by $19 million.Law Enforcement/Public Safety: Lose $278,000 in grants covering crime prevention, prosecution, drug treatment, etc.Job Search Assistance: Lose $550,000 covering referral, placement and assistance, affecting 18,780 people.Child Care: Up to 300 disadvantaged children could lose access to child care.Vaccines for Children: 1,860 fewer children would receive vaccines covering such diseases as measles, mumps, rubella, tetanus, whooping cough and others as funding drops by $127,000.Public Health: Loss of funds to cover responses to disasters; loss of more than $1 million in grants to cover substance abuse; loss in funding means fewer HIV tests.Stop violence against women/ seniors: Victims of domestic violence could lose service funds while $791,000 in funds for meals for seniors would be cut.Source: The White House
But South Carolina Gov. Nikki Haley, who was among the governors meeting with President Obama, said she “could not be more frustrated” with the Washington standoff.
“It’s unfair to the American people who elected all these leaders,” she said. “I would challenge the president and the leadership in Congress to sit at a table and quit talking in the media about what needs to be done. They need to solve this so the governors and the people of this country know what to do.”
The Charleston region would be among the hardest hit, according to the administration’s estimates, with much of the blow being felt by Department of Defense civilian workforce employees.
The expected reliance on furloughs, for instance, would force some 11,000 DoD workers statewide — with about half from the Charleston area — to stay home one day a week, probably beginning in April through September. It would take about $59.5 million in gross pay out of circulation, the report said.
“This is going to affect our military readiness,” Jason Furman, principal deputy director of the Obama administration’s National Economic Council, said of the cuts. “This is going to affect everything we do to defend our country.”
He added, “there is no good way to do cuts of this magnitude.”
In total, the sequester calls for $85 billion in spending cuts over the next seven months, across both federal defense and non-defense budgets.
South Carolina may still fare better than some other states in overall effect, as Virginia, California and Texas are regularly named as benefitting the most from DoD funding in recent times.
S.C. Treasurer Curtis Loftis said Monday that South Carolina might be among the three to five states hit the hardest if one factors in both military and social spending in the state. “And that’s not good.”
Loftis said the White House’s state-by-state analysis was a scare tactic in its bid to avert sequestration — an idea that it put forth.
Haley said there’s finger pointing on both sides but that governors got no insight Monday into where the president thought spending could be cut.
“Across-the-board cuts, we know, are not good for anybody,” she said. “He was very quick to say he wanted more government money. He was totally quiet on where he wanted to go on cuts. That’s the problem.”
Beyond military cuts, the White House listed numerous hits to public services in South Carolina if nothing is done by Friday, ranging from fewer teachers to less money for environmental protection duties and cuts that mean the state providing nearly 7,000 fewer HIV tests.
Reach Robert Behre at 937-5771. Reach Schuyler Kropf at 937-5551.
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