Sequester 101: What happens if cuts kick in March 1 and four other questions

The sequester is a complex concept with a tortuous history. Here are the basics on the automatic spending reductions set to kick in March 1.

By , Staff writer

4. What would the cuts do to the economy?

At $85 billion, the cuts amount to a sliver of the more than $3 trillion annual federal budget. They’re an even tinier speck of America’s $16 trillion economy.

Still, with impacts measured in billions of dollars, the sequester is not trivial. The cuts could cost 750,000 jobs in 2013 and reduce GDP by more than half a percentage point, according to the Congressional Budget Office. This estimate largely jibes with the prognostications of several private-sector forecasters.

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