Cancellation of Sequestration Would Lead to 1.6 Million New Jobs
According to a new analysis released by The Congressional Budget Office, a full cancellation of the sequester by August 1 would allow for the creation of up to 1.6 million jobs. It has been predicted that sequestration will lead to the loss of up to 700,000 jobs as well.
Current predictions indicate that spending cuts are more harmful to the American economy than they are helpful. Moving forward, however, bipartisan action is unlikely. President Obama supports "a combination of targeted spending cuts and tax increases to further reduce budget deficits" rather than sequestration. Currently, the deficit and national unemployment rates stand at $16.9 trillion and 7.6.
The sequester has been costly, leading to considerable cuts on social programs such as Head Start and Section 8 housing vouchers, as well as the International Monetary Fund's lowering of the United States' GDP growth projections. If the spending cuts were cancelled, however, American economic activity would see a small increase of 0.7 percent and a lower. Chris van Hollen (D-MD), ranking member of the CBO, said that "while we've made important economic progress in the last few years, it is indefensible that Congress would impose self-inflicted wounds on our still-recovering economy, especially while so many families are still struggling to make ends meet."
Media Resources: Reuters 07/25/2013; Huffington Post 07/25/2013; ThinkProgress 06/06/2013; ThinkProgress 07/26/2013
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