What is the sequester and how does it affect you?
750,000 jobs may be lost
Last Updated: 84 days ago
CLEVELAND - We've been hearing a lot about the sequester in the news and from politicians, but what does it really mean? Does it affect you?
These are the questions Scripps partner NewsChannel5 in Cleveland asked a financial advisor, who explained just what it all means.
"I think there was an idea that we'd reach an agreement because we'd never actually get to that point to begin with, yet here we are a year in a half later and we still can't get to that agreement," said Matt Olver, Vice President & Wealth Advisor at Spero Smith. It's an investment advisor company that works with clients and businesses in the area.
Olver spent time with NewsChannel5 going over the "substance" of the sequester.
"The sequester, right now," said Olver, "is as a result of what happened in 2011 when Congress couldn't come to a resolution in raising the debt ceiling and reducing expenses at that point in time. So they put in across the board on most domestic programs, and government and defense spending across the board cuts."
$85 billion worth of cuts that are expected to be slowly implemented, but Olver said there are two groups that will be hit the hardest.
"Anybody that's dependent upon the defense industry so defense contractors, anyone that's a supplier to defense contractors, they actually will see the biggest cut. Now in Ohio that's not going to affect us as much as some other areas. But any state that has a military base will see layoffs in the civilian employment bases," Olver said.
Where Ohio will take a hit and the rest of the country for that matter, explained Olver, is in federal programs, like the Head Start program for kids.
"The lower income and those that are dependent on federal programs will feel the affect the most," said Olver.
Some other areas affected include the airport and a reduction in airport security or reduced hours at the Social Security Administration.
"A lot of these are just reduction in workforce, reduction in hours that are being worked, which are going to create longer delays for, you know, the average American," said Olver.
But he also noted that reduction to the workforce is estimated to be 750,000 jobs lost.
The goal of Congress Friday, said Olver, was to agree on what certain areas should receive most of the cuts instead of just implementing these cuts across the board.
Friday evening President Obama signed an order to begin the $85 billion sequestration spending cuts.
Olver said the best thing for parents and adults to do now is contact those federal programs they utilize or check on their websites, which will outline how those agencies and organizations may or may not be affected.
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