Impact of the sequester on Florida business and economy

As the sequester deadline of March 1, 2013 approaches, there is an effort on the part of the political establishment to affix blame.

Republicans in congress assert the sequester was the brainchild of President Barack Obama, and he has failed to do anything to avert its’ consequences. The President accuses Republicans of failing to seize opportunities for compromise, and points out congress voted for the process.

In fact, the sequester is an $85 billion default plan of cuts contained within the 2011 Budget Control Act. The 2011 Budget Control Act was supported by the President, leaders in both parties, and was ultimately passed by congress. From the outside looking in, blame can be attributed to the political climate of partisanship over the past four years.

The country is now in a position of analyzing the effects of an across the board $85 billion cut. No matter what side of the political fence one stands, there is no denying the fact such drastic and relatively immediate cuts would have a negative impact on business, education, economic development and jobs; and that does not take into account the revisiting of the budget deficit discussions, fast approaching.

If sequestration were to take effect, some examples of the impact on the nation in general and on Florida in specific are:

National

Education: up to 70,000 young children would lose access to Head Start, 10,000 teaching jobs would be at risk, and funding for up to 7,200 special education teachers, aides and staff could be cut.

Small business: guarantees by the SBA would be cut by up to $900 million putting constraints on financing needed by small businesses to maintain and expand operations and create jobs.

Security and safety: the FBI and other law enforcement entities would be reduced in capacity equivalent to approximately 1,000 Federal agents. The U.S. Customs and Border Protection would be reduced in capacity equivalent to approximately 5,000 border patrol agents and 2,750 customs officers.

Florida

Teachers: funding of $54.5 million for primary and secondary education would be cut resulting in the loss of approximately 750 teaching jobs.

Military readiness: approximately 31,000 civilian employees would be laid off. Approximately $7 million, $23 million, and $135 million in operation funding would be cut for Army, Air Force, and Navy bases, respectively.

Law enforcement: approximately $970,000 in justice assistance grants supporting law enforcement, prosecution, and crime prevention would be lost.

Job search: approximately $2.3 million in funding for job search assistance, referral, and placement services would be lost.

The above covers a relatively short-term effect. Over a longer time frame, the Miami Herald reported Miami-Dade County hospitals could lose $224 million and Broward County hospitals could lose $144 million over a ten year period.

Representative Mario Diaz-Balart (R), a member of the House Appropriation Committee, has said, “Because these cuts are across the board, my fear is that essential services that are lean and efficient will get hit hardest. They have less wiggle room, unlike programs that are bloated and fat.”

The trickle-down of sequestration would certainly have a negative impact on businesses, jobs, and economic development in the State of Florida.

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, Fort Lauderdale Business Law Examiner

Armand is an arbitrator, mediator, business consultant and former NFL contract advisor. His interest are business, education, ethnic culture, law, sports, and a dash of politics.

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