Sequestration is here; now what?
So, it's Saturday. We're still here. Life goes on. But as you've probably heard, sequestration has dawned. And you might have plenty of questions about how these automatic budget cuts affect you - or your neighbors, or Hampton Roads in general. Below are some of the key things you need to know about the unfunny phenomenon with the funny name.
Q. How did we get here, and who is responsible?
A The automatic, across-the-board cut was dreamed up during budget negotiations in 2011 when politicians were fighting over the debt ceiling. The sequester was never supposed to happen; it was designed to be an economic wrecking ball so ridiculous that even feuding legislators and the White House would find a way to compromise and stop it.
Obviously, it wasn't ridiculous enough, because here we are.
The heart of the issue is the national debt, which has been rising steadily for more than a decade and now stands at about $16.6 trillion. Last year, the government borrowed $1.1 trillion to cover its expenses - the equivalent of $2.1 million every minute.
While each side accuses the other of creating the sequester, the truth is, it was a group effort. The bill that raised the debt ceiling - and included the threat of sequester - was approved by the Republican-majority House and the Democrat-controlled Senate and signed into law by President Barack Obama.
Hampton Roads' delegation was split, with Reps. Scott Rigell, R-Virginia Beach, and Rob Wittman, R-Westmoreland County, voting yes and Reps. Randy Forbes, R-Chesapeake, and Bobby Scott, D-Newport News, voting no.
Sen. Mark Warner and then-Sen. Jim Webb, both Virginia Democrats, voted for the bill.
The cuts were to begin on Jan. 1, but Congress and the White House agreed to a two-month delay. Now, the government must trim $85 billion by Sept. 30, the end of the fiscal year.
Q. How does the sequester work? What government services and military spending is not affected?
A. With some exceptions - mostly in programs involving the elderly, lower-income families and military salaries - the cuts are inflexible and across the board, involving nearly all federal spending programs. Divided evenly between defense and non-defense spending, the cuts are to be spread uniformly over the next nine years, according to the Bipartisan Policy Center.
Certain programs are exempt. Among the biggest are Social Security, Medicaid, veterans' benefits, retirement programs and refundable tax credits, according to the Congressional Research Service. War spending will remain intact, although it is already slowing significantly.
Child health care and nutrition programs - things like school lunches, foster care, Pell Grants and assistance for lower-income families - are also exempt.
Some programs are subject to limited cuts. Examples include Medicare, student loans, federal pay, unemployment compensation and some federally funded community health services.
Military pay and benefits remain untouched for now, but some experts have warned that Tricare, the military's health care plan, could face problems later this year.
Q. Why does cutting $85 billion from a budget of more than $3 trillion cause so much pain? Isn't it a drop in the bucket?
A. Relatively speaking, it is a small part of a large federal budget. However, the sequester's impact is huge - particularly in Hampton Roads - because the cuts are focused on specific parts of the federal government. This was intentional so that they would hurt programs important to many legislators.
For example, the Defense Department has to absorb half the automatic cuts even though its 2012 budget - about $614 billion - accounts for about one-fifth of all federal spending. The Navy is being forced to cut $4 billion in six months from its $154 billion annual budget.
The Pentagon also is forbidden to cut the pay and benefits of uniformed personnel.
Because many big-ticket domestic programs are exempt, the remaining non-defense programs will have to trim spending between now and Sept. 30 by 9 percent, according to the White House Office of Management and Budget. The Pentagon will trim 13 percent of what they would have spent during the next seven months.
The cuts also must be spread across the board. This means, for example, that the Federal Aviation Administration cannot exempt air traffic controllers' pay by cutting more somewhere else.
The result is that many agencies are making plans to furlough employees, giving them as much as one day a week off without pay - as the Defense Department has warned - to reduce their budgets.
Q. What's different today, now that the sequester has begun? When will we notice?
A. In short, not a whole lot. Some have likened sequestration to tumbling down an increasingly steep hill, as opposed to falling off a cliff. The worst pain comes later.
The Navy on Friday released a list of reductions effective immediately while promising to hold off on other planned cuts - including canceling shipyard contracts - as long as possible. Next month, the Navy will shut down one of its nine carrier air wings, including a squadron of F/A-18 Hornets based at Oceana Naval Air Station. Other government agencies also have developed plans to roll out reductions over time.
You might begin to notice if there's no resolution before April, when hundreds of thousands of government workers - including up to 39,000 Navy and Marine Corps civilian employees in Hampton Roads - are expected to be furloughed. Most have been told they will be sent home without pay one day a week for 22 weeks, which amounts to a 20 percent pay cut for that period.
Officials have warned of delayed flights, reduced hours at national parks and possible meat shortages related to a reduction in food inspectors.
Q. I'm in the military or am a military family member. How will the sequester affect me and my family?
A. The reality of sequestration hit early for thousands of Hampton Roads sailors and their families when the Pentagon decided to cancel the aircraft carrier Harry S. Truman's deployment last month with less than two days to spare. The last-minute call meant a whirlwind of changes for sailors who had packed possessions into storage and for spouses who had prepared for their loved ones to be away for eight to 10 months. More deployment changes - and uncertainty - are ahead.
Because training and maintenance cutbacks are required by the sequester, Navy brass warn that some ships won't be ready to deploy on time, while others could remain out indefinitely.
The Navy says furloughs will affect military medical facilities, including Portsmouth Naval Medical Center. The Navy's surgeon general has said that doctors might be forced to delay some elective procedures and refer some patients to private sector clinics - a move that likely would cost the government more in the long run.
Other impacts: Beginning in April, commissaries will be closed on Wednesdays, unplanned drop-off hours at military child care centers will be reduced and many uniformed personnel likely will take on heavier workloads to compensate for the drop in civilian employee hours.
Q. I'm not in the military but live in Hampton Roads. How will I be affected?
A. Anyone working for the government or benefiting from federal government programs will eventually feel some impact, whether it's longer lines at airport security checkpoints, longer waits for trial dates or slowdowns to the defense industry that could eventually ripple through Hampton Roads' economy.
Economists at Old Dominion University on Friday predicted the region would lose more than 12,200 jobs if sequestration continues through the end of 2013, with a total economic impact of $2 billion.
According to Stateline.org, Virginia will be the state most affected by sequestration; Pentagon contracts accounted for more than 8 percent of the state's economy in 2011.
"If sequestration occurs as it's currently laid out, Virginia will end up in recession," said Christine Chmura, an economist with Chmura Economics and Analytics who worked with George Mason University to study the potential effects of the cuts, according to Stateline. "I don't think the nation will. I think activity will slow in the nation, slow to a crawl.
"But make no mistake," she added, "it is going to hit (Virginia) harder than other places."
Cuts to federal education funding will put some teacher and teacher's aide jobs at risk; there will be fewer Head Start and Early Head Start spots for pre-K children; tuition assistance for college students will shrink; and there will be fewer work-study jobs on campuses.
Furloughs mean government offices will have leaner staffing, and it might be harder to get a federal worker on the phone. You could see longer lines at the post office, longer waits for takeoff on runways and lengthier processing times for passports. Prisoners in federal facilities could face longer lockdowns.
The IRS would take longer to respond to inquiries from taxpayers.
If you work in military industries such as ship, aircraft and weapons building, you will probably feel the repercussions as military contracts slow. Companies are already saying they will probably have to cut pay or lay off workers - or both. There could be economic ripple effects on home sales and property values. If you own a rental property, it might be more difficult to find a tenant. Car dealers might see a drop, and retail businesses could suffer.
Q. Is this reversible? If Congress strikes a deal 10 days from now, or two months from now, will everything go back to the way it was before?
A. Yes, but not totally.
Because most of the cuts are staggered over the next several months, there's still time to undo them. However, the longer this drags on without a resolution - particularly for the Navy - the harder and more expensive it will be to return to normal.
For example, once the service shuts down four of its carrier air wings and begins the process of putting jets in long-term storage - a maneuver known as "bagging the jets" - defense officials estimate it will cost three times as much and take up to a year to restore pilot skills and airplane efficiency.
If sequestration ends, the Truman won't suddenly deploy, canceled ship repair contracts will have to be restarted and air shows that have already been canceled - including the annual show at Langley Air Force Base - still won't happen.
Cuts involving personnel will be easier to resolve; in theory, the furloughs would end, and those services would return to normal operation.
Q. Is this as bad as it gets?
A. Nope. If sequestration is the gloom, the doom could arrive March 27. That's the deadline for Congress to pass a new budget. If it continues to fund the government at 2012 levels - under what's called a continuing resolution - the Navy will have to reduce spending by an additional $4.6 billion during the last six months of the fiscal year. Much of the savings would come from canceled shipyard contracts.
Of course, there's an even worse-case scenario: If Congress doesn't act before the next deadline, the government shuts down.
Compiled by Pilot writers Bill Bartel, Mike Hixenbaugh and Dianna Cahn.