The Daily Item, Sunbury, PA

Fiscal Cliff

December 29, 2012

With No 'Cliff' Deal in Sight, Sequestration Seems All But Certain

WASHINGTON — It was designed to be the budget cut so painful, so indiscriminate, so downright mindless that even a gridlocked Congress wouldn't allow it to happen.

Now, it looks like it's going to happen.

Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., spent Saturday working on a last-ditch deal to spare the vast majority of Americans a dramatic tax increase on Jan. 1.

But even if they reach a stripped-down agreement, aides in both parties have said it would be unlikely to address the other part of the "fiscal cliff," an automatic $110 billion reduction in government spending, split evenly between military and domestic programs, that is scheduled to take effect the next day.

Aides said the two sides hope to secure a large spending-reduction package in the late winter — during an expected showdown over lifting the federal debt ceiling — and deal with sequestration, as the automatic cut is called in Congress-speak. But that possibility would still result in a potentially harrowing few months for agency budgets.

In the meantime, the Washington, D.C., region, home to hundreds of thousands of federal workers and an economy that was cushioned from the worst of the 2007 recession by federal spending, was bracing Saturday for an economic punch from the failure to deal now with sequestration.

Federal agencies have informed their employees that they probably wouldn't feel the impact immediately, but the reality of furloughs is setting in for a deeply anxious federal workforce.

"Undoubtedly, we will take a hit," said Rep. Gerald Connolly, D, whose Northern Virginia district is inhabited by thousands of government employees and contractors. "It's going to result in a steady retrenchment in government investment in both the civilian and defense sectors. That's going to affect employment and the robustness of our economic growth in this region."

Text Only
Fiscal Cliff
The Daily Marquee