You Haven't Seen the Last of Federal Budget Cuts

You Haven't Seen the Last of Federal Budget Cuts

The across-the-board, belt-tightening nightmare known as the sequester cut over $85 billion from the 2013 budget, causing outrage on both sides of the aisle. Unfortunately, high-magnitude budget cuts are likely to continue into 2014, according to CNN Money.

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This is because the defense and domestic discretionary budget for fiscal year 2014, which begins Oct. 1, will be capped at $19 billion less than last year.

Fortunately, unlike the the sequester cuts, lawmakers and agencies will at least have some say in what gets slashed this time around. Social Security, Medicaid, food stamps and several other programs will be exempt from cuts, while others, including WIC, farm subsidies and federal extensions of unemployment benefits could find themselves on the chopping block.

The House and Senate are at odds when it comes to what should be cut, and if no resolution is reached by Sept. 30, the government will shut down. The most likely course of action is the passage of a continuing resolution, which will fund the government for a set period of weeks or months. But unless that resolution explicitly terminates the spending cap, new cuts will go into place on Oct. 1.

Congress could lift the spending cap and therefore avoid any additional cuts, but that seems unlikely.

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