How Does Sequestration Affect You?


For many, the word “sequestration” is just another overly-hyped term being thrown about the halls of D.C. that doesn’t actually have any real effect on the average American citizen. However, if you know anything about how economics works, then you understand that no matter where large cuts like this take place, they ultimately affect all of us. Call it the trickle down effect or whatever you want: cuts in the government means cuts for small businesses and individuals, both directly and indirectly.

For example, the IRS announced that portions of the Affordable Care Act that offer some health care incentives for small businesses will have cutbacks. This means that health care benefits are now a little more expensive for employers. This could result in  lowered benefits or benefits that are eliminated in full.

Another direct impact is on individual and small business contractors who work with the government. With such large cutbacks, many of these contractors will have significant reduction in work, and some completely cancelled contracts. Additionally, employees of government agencies are now receiving notifications of furloughs which range from a couple of days to several, depending on the government’s definition of necessary services.

But if you aren’t a government contractor or employee, how will these cuts impact you? Of course some of these people are your clients, neighbors, customers or vendors. Plus any reduction in government services means inconveniences for citizens. The Huffington Post broke down a few of the most obvious sequestration effects:

  • The FAA will eliminate midnight shifts at some smaller airports. Additionally, some of the larger airports will need to close runways which will likely result in significant delays and some cancellations.
  • Though IRS furloughs won’t happen until the summer, there will be some impact immediately such as delayed responses to taxpayer letters and less help from call centers and assistance centers.
  • Funerals for veterans at Arlington National Cemetery will be reduced by an average of 160 a week, resulting in delays for deceased troops from wars past.
  • The Coast Guard rescue aircraft will be deployed fewer hours and patrols will be reduced, focusing primarily on emergencies.
  • The Food and Drug Administration estimates there will be 2,100 fewer food safety inspections.

At the end of the day, the sequestration won’t bring everything to a grinding halt, but it will mean a reduction in salary for many, delays in services for all, and some inconveniences that will hopefully never go beyond minor. Like any other time in recent years when money has been tight, it’s important to plan appropriately. If you’ve got questions about how this could impact you or your business, give us a call.

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