Sequester Moves Forward, Impact to Housing Pending

The first of March means that the “sequester” is here, or the start of $85 billion across-the-board cuts to domestic and defense spending. While Congress and the White House have yet to reach an agreement on how to address these cuts, thousands of government employees risk unemployment unless a deal is made.

Cooperation between Republicans and Democrats is the crux of the issue. Republicans are opposed to any additional tax increases that could avoid current cuts, while Democrats believe they will eventually “see the light,” as The Hill puts it, and give in to raising taxes. 

It might even take as long as April to turn off the sequester, notes The Hill. By the end of that month, job cuts look to hit the government entities, such as the Defense Department. 


Budgetary cuts as a result of the sequester could cost 750,000 jobs in this year alone, according to the Congressional Budget Office. 

If Congress cannot stop the cuts this year, a total of $110 billion in spending reductions will be implemented between October and September, the cuts falling to domestic programs like the Federal Housing Administration (FHA).

In February, Department of Housing and Urban Development (HUD) Secretary Shaun Donovan outlined the impacts of sequestration to the agency’s counseling programs, saying cuts could even work their way down to HUD employees. 

“Sequestration would directly affect the employees who work for HUD itself, along with their families and communities,” said Donovan. 

Leading over 9,000 HUD employees across the nation, Donovan also said that government furloughs as well as other actions may be required to comply with sequester cuts. 

The sequester is also likely to impact FHA’s insurance program, as fewer loan guarantees will lead to less revenues for the agency. 

Written by Jason Oliva

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  • Are we really in that much trouble that a 2% cut in Medicare and a 5.2% annual cut in non-defense discretionary spending is going to send us over the edge? I don’t think so. It may actually expose the bloated and overweight bureaucracy some of us have suspected for some time. I guess that I too would be screaming from the top of the mountain if I was used to getting a COLA for my budget each year as it appears they have become accustomed to, so its important to take the screamer’s position into perspective. As far as the cuts to HUD I have not found anything giving real numbers as to the effects. Several have bantered about the cuts to housing counseling, that appears to be one susceptible area BUT not everyone I have met with has an issue with $125 housing counseling costs. I would have to believe that they won’t be suddenly dropping hundreds of HUD employees, more like attrition and furloughs (4 day work week) if they do anything at all. I guess you can see I’m not convinced all the news on this is bad.

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