Sequestration To Start Today

dollarThe long awaited delayed automatic sequester cuts totaling $85 billion in defense and domestic spending for the 2013 fiscal year are set to begin today.

Over a nine year period, the sequester cuts total $1.2 trillion and represent slightly over 2 percent of the federal budget.

The cuts will impact federal spending in areas such as air traffic control, border protection, food inspection, military training, and relief spending for victims of Hurricane Sandy.

Republican House Speaker John Boehner said yesterday that it is time for Senate Democrats to  propose a viable alternative plan to avert the impact of the sequester cuts before the Republican majority in the House can pass a bill.

“Republicans have voted twice to replace the president’s sequester with smarter spending cuts and reforms. But the president and Democrat leaders have failed to  pass a solution of their own” Boehner said yesterday during a press conference.

“It’s time that they do,” he added.

Consumer Spending and Other Economic Data

Consumer spending continued to rise in January although American incomes dropped by the most in 20 years which suggests that Americans have continued to spend in the midst of the payroll-tax increase and higher gas prices.

The Commerce Department announced today that consumer spending increased 0.2 percent
in January while incomes fell 3.6 percent, the largest drop since the early 1990’s.

Meanwhile, ISM manufacturing index rose to 54.2 and U.S. construction in January decreased 2.1 percent from December.

U.S. Michigan Consumer Sentiment Index increased to 77.6 in February.

 

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