Looking Back How Has Sequester And Widespread Spending Cuts Impacted Institutions in 2013
If you were indirectly affected by sequester and the spending cuts in 2013, you may have already forgotten the struggles and debates that characterized the beginning of 2013. After much deliberation on the part of congress, the spending cuts were permitted and across the board spending cuts were forced on government agencies, including the military, airports, hospitals, etc. You don’t have to look too far to see public services that were impacted by the 2013 spending cuts. Where I personally live and work, the air traffic controller tower was shut down, leaving many without jobs and threatening the safety of those travelling in and out of the airport. The hospital, too, is facing loss of income from the government, fewer bonuses and reimbursements, and is making massive cuts across the board to try to reduce expenditures with the start of the new fiscal year this July. For patients, this means fewer nurses, which increases the likelihood of sentinel events, decreasing the level of care able to be provided by the staff.
Looking Forward, More Spending Cuts To Occur In 2014
Understanding the plight of the country in regard to their budget deficit has made it easier to understand the need for spending cuts, but the overall application of the spending cuts can be more difficult to swallow. Starting in 2014, an additional 19 billion in spending cuts, on top of the current spending cuts, are set to go into action. This will affect the discretionary budget, which typically funds government programs and agencies, national parks and the FBI.
Execution Of The Spending Cuts Will Be More Flexible In 2014
Compared to the spending cuts in 2013, which consisted of mandatory, across the board cuts, the 2014 cuts will offer more flexibility in how they are executed. Lawmakers are simply obligated to keep spending below the cap. Basically, this means that in 2014, some agencies may be spared entirely, and other agencies may feel the full force of the spending cuts. At this point, it looks like Social Security, Medicare and a few other programs will be left untouched, whereas unemployment benefits, farm subsidies and WIC, may feel the force of the spending cuts.
Will Congress Prevent 2014 Spending Cuts
As per usual, congress is still divided on whether or not to allow the spending cuts, and on whom the spending cuts should affect the most ie, domestic spending vs. defense programs. Unless congress can reach an agreement on spending, the government is scheduled to shut down on October 1st. Since this is not a great option for either party, in all likelihood there will be an extension that will fund the government for a few weeks or months. To complicate the matters further, in addition to the issue on spending cuts, the government will also be forced to make a decision on the debt ceiling this fall. Weighty decisions that impact everyone rest on the shoulders of our congressmen this fall, and their decisions could have a direct impact on the economy and the future.
For more information on how the government could impact the economy and how that will affect your investments, speak to a Redhawk Financial advisor near you today. It’s very important for your personal financial health, that you stay ahead of the markets and the economy when making financial decisions. By getting in touch with a Redhawk Advisor today, you can protect your future, and prevent it from resting solely on the decisions of lawmakers.