What Sequestration Could Mean For Small Businesses
The New York Times reports that small businesses will be further affected indirectly. The government spends more with American businesses than any other buyer, and a reduction in funds will translate to reduced buying power and a weakened economy.
"Government spending is at 8 percent of gross domestic product, and at a time like this, when the private sector is still climbing off the mat, the last thing you need is for the public sector to pull out," said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, told the Times. "So nonpartisan analysts predict that if the sequester takes hold, it will lower the growth rate of G.D.P. by half a percent. And that translates to an unemployment stuck at 8 percent and hundreds of thousands of fewer jobs."
While the budget cuts are looming, they are still not guaranteed. As with the ATRA, Congress could pass something in the early morning on March 1 that would address, or at least further delay, the budget crisis. The $85 billion cut that would be imposed on Monday would not happen all at once: governmental departments have until the end of the fiscal year, September 30, to implement all of the cuts. It is possible that agencies could wait until April or May before taking serious action, in hopes that that Washington would come up with a solution.
It looks like a solution, if it comes at all, will not happen before the March 1 deadline. President Obama has already made plans to meet with John Boehner, Nancy Pelosi, Harry Reid and Mitch McConnell at the White House on Friday to discuss what happens next.