Big Furloughs Are On the Way, If Sequestration Comes into Effect

A top pentagon official fears that in case congressional leaders do not come up with ways to avert mandatory budget cuts before the March 1 deadline, hundreds of thousands of civilian employees associated with the Pentagon will face furlough or their paychecks risks becoming trimmer by April.

While addressing a small group of reporters on Friday, Deputy Defense Secretary, Ashton Carter, said that those employees facing furloughs could miss one working data each week for the rest of the budget year, which ends September.

The series of dreaded automatic spending cuts, also referred to as sequestration, would force the U.S. Defense Department (DOD) to lower its budget in all defense programs by 9 percent besides it would put a cap on federal government’s entitlement programs—lest lawmakers in Washington fail to reach a accord on how to reduce nation’s fiscal deficit and ballooning debt requirements.

“This is painful to us,” said Carter.

The Pentagon at present has around 800,000 civilian employees; and thus far they have not been officially notified on possible furloughs. According to Carter, furloughs are expected to save the DOD $5 billion.

Meanwhile, Benjamin L. Cardin, (Sen. Maryland), a Democrat, said on Friday that lawmakers will miss the March 1 deadline to prevent the sequestration being set off.

Cardin, while meeting with the members of the House of Delegates said that said lack of reconciliation between the Democratic-led Senate and Republican-dominated the House of Representatives could prevent lawmakers to find a middle path on the issue of deficit reduction before the March 1 deadline.

The sequestration was expected to come into effect at the start of the year; however, thanks to a last-minute deal between the lawmakers which helped averting the U.S. economy falling off from the “fiscal cliff”—it was postponed until March 1.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.