Sequestration, Furlough, and Unemployment
The Definitive Guide to Weathering the Sequester Budget Cuts
Everyone in Washington has been discussing a sequester with which would come budget cuts and thousands of jobs lost due to a nationwide furlough from the lost funds. However, in order to truly understand the impact that such cuts can have, it's important to know exactly what sequestration is and what it means for the country.
Definition of Sequester
In August 2011, President Barack Obama looked to pressure Congress into working together to find a solution for the increasing debt by signing into law the Budget Control Act in the White House. The sequester is the series of budget cuts that would automatically come into effect as of March 1 at 11:59 p.m. should no solution be found for the fiscal cliff.
What Is the Fiscal Cliff?
This fiscal cliff is the term that Ben Bernanke, the Federal Reserve Board Chairman, coined for the numerous events that threatened to occur at the turn of 2013, such as the payroll tax cut and the end of tax cuts from the Bush era. These also include the first set of $1.2 trillion cuts across defense and domestic programs would require due to the agreement made last summer. Similarly, lawmakers needed to raise the debt ceiling, which ended up causing a major issue within Congress. According to the Congressional Budget Office, the government would be able to save about $600 billion in cuts but at the expense of the economy, likely causing a new recession.
After the debt limit was raised in 2011, Republicans stated that they wanted the sequestration cuts to be documented within legislation. The committee placed in charge of figuring out how to introduce the cuts within the Budget Control Act was not able to come up with a bipartisan agreement for the $1.2 trillion cuts. Congress was then tasked to find areas to make such cuts as the automatic sequestration cuts threatened to begin at any moment. So far, no deals have been made; though nobody truly intended for the cuts to occur, this is most likely going to be the course of action taken.
Who Will Sequestration Cuts Affect?
The sequestration plan will affect many aspects of government spending. In particular, the military will lose about $550 billion that draws away focus from military operations and national security. Domestically, disaster relief, unemployment benefits, health care, education, scientific research, law enforcement and non-profit organization funds will all suffer from the federal cuts.
However, not all hope has been lost; the legislation does specify some areas of government spending that will not be affected in terms of funding. For instance, Pell grants, some low-income programs, veteran benefits, Medicaid and Social Security will not be affected by the cuts due to the sequester.
Outside of these programs, sequestration means that over a trillion dollars will be effectively removed from the federal budget over the course of a decade. Wednesday, the Pentagon announced that it will attempt to absorb the impact by engaging in furloughs for civilian staff.
Across each state, 750,000 workers would be impacted by the government furloughs, from general office workers to aircraft maintenance workers and more. Though employees in each state will be impacted, it is expected that Virginia would lose the most with over $661 million cut in pay. From there, California would be next, followed by Maryland.
Can You Get Unemployment on Furlough?
On Wednesday, the Pentagon officials also stated that enlisted service members could suffer with spending cuts affecting training as well.
Workers affected by the government furlough would begin to lose 20 percent of payment, or a day or work for every week, for up to 22 weeks likely beginning in late April. Whether furloughed workers can collect unemployment largely depends on state law. Some states permit employees on furlough to receive unemployment benefits after being out of a job for a week. Due to this threshold, most employees on a short-term furlough tend to skip out applying for benefits.
As a means of weathering this furlough, however, employees can start to file for benefits during a first furlough to begin the week countdown, enabling them to immediately collect benefits should there be another furlough in the next 12 months or if the lost employment should continue for quite some time.
At American Progress, Sophia Kerby outlined a few reasons why all communities should worry about sequestration and its budget cuts. The main reason is that there would be deep cuts made to unemployment benefits, which would hurt those who have been receiving compensation for a longer period of time. In addition, 70,000 children could be left out of the federal program, Head Start, designed to ready children for school due to a $900 million cut.
Will I Lose My Unemployment Benefits Because of the Sequester?
Budget cuts would mean those who have been unemployed for awhile would lose nearly 10 percent of weekly benefits. Many programs like Medicaid and food stamps will not be affected by the forced cuts, but extended benefits for the unemployed will be impacted.
These payments will begin once the state benefits run out, which can be as late as 26 weeks. Eligible workers then can collect benefits for upwards of 47 weeks. Congress has authorized these payments, which average about $300 each week, since 2008; it's a program designed to protect millions of unemployed but willing Americans in an economy that has challenged those nationwide.
Most individuals will not immediately feel the effects of the budget cuts, but the slashes made toward unemployment benefits will certainly have a quick impact. These payments are often used to pay for necessities like food and shelter. The unemployed will also have fewer resources when seeking jobs at a center as the funding goes toward helping workers find new positions. States would also miss funding to administer the unemployment program, which leads to processing claims slower due to staff layoffs.
How to Stop the Sequester Budget Cuts?
Both the Democrats and Republicans are working diligently to stop the sequester before it happens, but the two continue to struggle on finding a solution. Democrats in the Senate came up with a plan known as the American Family Economic Protection Act that would replace the cuts through $120 billion in savings until the end of 2013. However, the Republicans did not agree with the solution, coming up with a counterproposal that would leave the sequester in place with Obama controlling the cuts. Neither plan gained much traction.
When Will I Find Out if I Get Furloughed?
With an agreement nowhere to be found, April 1 could mark the beginning of furlough notices. According to FAA Administrator Michael Huerta, early April would mark the beginning of flight cancellations and the shutting down of airports. During this month, USDA meat inspectors would begin to undergo furloughs as well, which would force meat processing factories to close without someone to inspect the product.
The long-term unemployed would also see checks drop early on in April.
The national parks in America may not open and offer the same tourist services that they do currently. For example, Yellowstone National Park often opens up in late April or early May, but sequestration cuts could lead the snow removal to be delayed and cause the park's opening to be delayed in turn of this.
Eventually, each state would need to figure out how it would cut the programs for low-income individuals that currently receive funds from the government, such as meal programs for senior citizens, mental health services, nutrition programs for children and child care assistance.
After all of this, the full force of sequestration would take effect by July, August and September.