A recent study done for ABC News/Washington Post noted that sequestration has diminished American’s economic optimism. As more in the country (not just in the D.C. area) feel the impact of across the board cuts, the overall number of those affected, of course, increases. Since the sequestration was intended to be a last ditch effort as a no-kidding timeline for politicians to make a decision on the budget, it is not a surprise that the impacts of sequestration are painful…and it has only begun. What increases the hurt of sequestration is the fact that it has been served on top of one Continuing Resolution after another.
Many agencies have been or will be affected, but the Defense Department could be hit the hardest, with eleven furlough days set to begin on July 8, 2013. Some agencies have avoided furloughs with hiring freezes, staff cuts, cuts to employee benefits, or travel freezes. To date, public opinion of sequestration has been mixed. A skewed view of what government contractors and federal employees accomplish for the country can impact the public’s view of the situation. Many have seemed apathetic or even glad that this is how the government is allegedly saving money, even if it was never intended to take effect.
While concern about the impact of sequestration is waning, due to a perceived shrinking of the country’s deficit, the question has to be asked: Does this save dollars in the short term only or does this really impact the long term budget? Based on the timeline of agencies already impacted by furloughs, the worst is still to come. The economy could be recovering or perhaps, we have not seen the true impact yet. The surge in revenue is not from budget cuts, but rather, from actual revenue increases (such as tax cut expirations at the beginning of the year). It is yet to be determined how the Defense Department furlough will impact the economy.
Sequestration may seem like a simple solution, but the furlough does not just impact federal employees. Time away from the job means inefficiencies with their communications with contractors. A furlough means less money being spent on items that help to boost the economy – groceries, household items, entertainment, etc. It means a decrease in employee morale, which could mean a career change and the loss of knowledge and expertise. Also, while sequestration and furlough may affect government employees hardest today, contractors are likely to feel the burn six months to a year down the line, when positions are cut from existing contracts and government program managers look to ‘trim the fat.’
The real question is what happens at the end of the fiscal year. With no real budget in place and politicians’ interest dwindling in the impact of sequestration, is this an issue that plagues federal employees and contractors into FY2014? What will federal contracting look like at the end of this fiscal year? What will the job situation be not just in Washington but also across the country? Time will only tell. The results will not be tallied until the next round of furloughs begin to hit in the next six weeks. Unfortunately, the lost work or inefficiencies that were created due to the cuts will never be calculated.
