News / USA

IMF to Revise US Growth Forecast, Sequester Blamed

IMF to Revise US Growth Forecast, Sequester Blamedi
X
March 02, 2013 2:02 AM
Now that the deadline for a Congressional compromise has passed, the process of cutting $85 billion from the federal budget begins. Economists say the impact will not be immediate, but the fallout already has begun. For VOA, Mil Arcega has more.

IMF to Revise US Growth Forecast, Sequester Blamed

Now that the deadline for a Congressional compromise has passed, the process of cutting $85 billion from the federal budget begins. Economists say the impact will not be immediate, but the fallout already has begun.

With across the board budget cuts all but guaranteed, some government agencies already have placed a freeze on hiring. At the Federal Aviation Administration, up to 40 thousand workers expect to see their hours reduced.

"It means I will probably be late on a house payment, not buy enough groceries, and then you throw that in with gas prices going up, it is devastating," said Gary Perusse, FAA worker.

The same is true for customs and border security agents, for meat inspectors and educators. Low-income families and the long-term unemployed also will lose benefits. The net effect, said budget expert Scott Collender, is negative stimulus for an economy that's barely growing.

"Without businesses spending, without consumer spending, without trade helping, lower government spending is going to hurt and hurt substantially," said Collender.

Estimates say the cuts could shave more than half a percent from gross domestic output. That's enough for the International Monetary Fund to revise earlier estimates for U.S. growth.

"A lot of it depends upon how aggressively or how fully sequestration is implemented. There will be an impact on global growth," said IMF spokesman William Murray.

Analysts say the spending cuts could cause delays in shipping and cut U.S. demand for imported goods.

Most frustrating, said economist Charles Konigsberg, is that the crisis could have been avoided. "I think it's a lose, lose situation. Everyone loses."

The cuts come as the economy was showing signs of progress. Despite the setback, President Barack Obama said negotiations with Congress would continue.

"...if Congress comes to its senses, a week from now, a month from now, three months from now - then there's a lot of open running room there for us to grow our economy much more quickly," said Obama.

You May Like

Scotland Vote Raises Questions of International Law

Experts say self-determination, as defined and protected by international law, confined narrowly to independence movements in process of de-colonization More

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

Conservationists hail ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015 More

Annual Military Exercise Takes on New Meaning for Ukraine Troops

Troops from 15 nations participating in annual event, 'Rapid Trident' in western Ukraine More

This forum has been closed.
Comment Sorting
Comments
     
by: Sherry Chen from: LA
March 04, 2013 11:37 AM
Republic played a unwise role in rivaling election by suppressing the economic achievement of Democracy. No matter considering how the condition of US is, how crucial the recovery is and what the recovery needs, in their ideal, competition always is ranked as the primary.


by: Davis K. Thanjan from: New York
March 02, 2013 10:19 AM
Instead of furlough, the federal government should freeze all hiring, terminate the services of non-essential personnel and create more jobs by approving projects like Keystone Pipeline. While the New York City has to balance the budget every year, why a comprehensive federal budget is not produced during the last three years, balancing the budget. If New York City can do, so also the federal government can if there is leadership.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Russian Economy Reeling After New Western Sanctionsi
X
September 18, 2014 2:28 AM
A new wave of Western sanctions is hitting Russia’s economy hard. State-owned energy firms continue to bleed profits and Russia’s national currency plunged to a new low this week after the U.S. and the European Union announced new sanctions to punish Russia's aggressive stance in eastern Ukraine. But as Mil Arcega reports, the sanctions could also prove costly for European and American companies.
Video

Video Russian Economy Reeling After New Western Sanctions

A new wave of Western sanctions is hitting Russia’s economy hard. State-owned energy firms continue to bleed profits and Russia’s national currency plunged to a new low this week after the U.S. and the European Union announced new sanctions to punish Russia's aggressive stance in eastern Ukraine. But as Mil Arcega reports, the sanctions could also prove costly for European and American companies.
Video

Video Belgian Researchers Discover Way to Block Cancer Metastasis

Cancer remains one of the deadliest diseases, despite many new methods to combat it. Modern medicine has treatments to prevent the growth of primary tumor cells. But most cancer deaths are caused by metastasis, the stage when primary tumor cells change and move to other parts of the body. A team of Belgian scientists says it has found a way to prevent that process. Zlatica Hoke has more.
Video

Video Mogadishu's Flood of Foreign Workers Leaves Somalis Out of Work

Unemployment and conflict has forced many young Somalians out of the country in search of a better life. But a newfound stability in the once-lawless nation has created hope — and jobs — which, some say, are too often being filled by foreigners. Abdulaziz Billow reports from Mogadishu.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.
Video

Video NASA Picks Boeing, SpaceX to Carry Astronauts Into Space

The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video Future of Ukrainian Former President's Estate Uncertain

More than six months after Ukraine's former President Viktor Yanukovych fled revolution to Russia, authorities have yet to gain control of his palatial estate. Protesters occupy the grounds and opened it to tourists but they are also refusing to turn it over to the state. VOA's Daniel Schearf reports from Mezhigirya, just north of Kyiv.
Video

Video China Muslims Work to Change Perceptions After Knife Attacks

China says its has sentenced three men to death and one woman to life in prison for a deadly knife attack in March that left more than 30 dead and 140 injured. Beijing says Muslim militants from China's restive western region of Xinjiang carried out the attacks. Now, more than six months after the incident, residents in the city are still coping with the aftermath. VOA's Bill Ide has more from Kunming.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid