Short-Term Flexibility Won't Help Long-Term Impact of Sequestration

March 27, 2013

President Obama signed legislation Tuesday to keep the government funded through the end of September and to give greater flexibility to a handful of agencies as they roll out the mandated across-the-board spending cuts known as sequestration.

Still, this flexibility does not change the dollars and cents of the equation, nor will it blunt the long-term economic impact. “I think, honestly, the overall macroeconomic impact and near-term prospects aren’t going to be that dramatic,” said Douglas Holtz-Eakin, a former director of the Congressional Budget Office and president of the American Action Forum, a conservative think tank. “You might do a better job of delivering government services, and people care about that.”

The Defense Department, for instance, will have more control over over the cuts that need to be made. Similarly, programs involving embassy security, meat inspection, and infant nutrition will not see the same level of reductions, or any at all, for the rest of this fiscal year.

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