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What the 'sequester' means for you ... and what won't change

For millions of Americans, life should go on much as usual, but for millions of others cuts in federal spending from the 'sequester' are likely to bring tangible effects. Which camp are you in?

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Veterans. All programs administered by the Veterans Administration, and special benefits for certain World War II veterans, are exempt from cuts.

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Food stamps. The program formally called the Supplemental Nutrition Assistance Program (SNAP) is unchanged.

SSI. The Supplemental Security Income, which pays benefits to disabled adults and children who have limited income, continue as is.

Foster care. Foster care and Permanency Programs.

Treasury bonds. Net interest on the national debt is to be paid as usual.

Tax credits. Payments to individuals in the form of refundable tax credits will proceed as usual, such as the earned-income tax credit (EITC) for low-income households.

Low-income support programs. Many low-income support programs are exempt, including Child Nutrition Programs (school lunch and breakfast, Child and Adult Care Food, and some others), Children’s Health Insurance Program (CHIP), Temporary Assistance for Needy Families (TANF).

Pell grants. The means-tested Pell grants that many college students rely on are shielded from the sequester. (But other student-aid programs in the discretionary budget, such as federal work study, are not.) 

Your obligations as a taxpayer. You’ll still be expected to file your tax return to the Internal Revenue Service as usual by April 15.

If what’s not being cut feels like “good news,” the flip side of that is that nonexempt programs will in many cases feel a sharp squeeze. That brings us to the next list....


Federal workers. First on the list is not a "what" but a "who." The federal government is a major employer, across the nation, not just in the area around Washington, D.C. Across the federal workforce, many agencies will need to furlough employees for as much as a day per week. This could equate to a 20 percent pay cut, for example, for most Defense Department workers. Benefits such as health insurance will largely continue.

Defense contractors. The cuts mean reduced hours or layoffs at many private-sector defense contracting firms. Ship-repair slowdowns could have a big effect in places like Newport News, Va.

Coast Guard. Coast Guard rescue aircraft will fly fewer hours, and cutters will patrol the seas for fewer hours.

Airports. Fewer flight controllers on duty could mean fewer planes can fly. Transportation Secretary Ray LaHood predicts flights to cities like New York, Chicago, and San Francisco could have delays of up to 90 minutes during peak hours.


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