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Analysis: Sequester Delay Causes More Uncertainty For Feds

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As 2013 gets underway, federal employees and contractors are working under a cloud of uncertainty. Congress postponed a deadline to address across-the-board spending cuts and that "sequestration" will now go into effect in March if lawmakers do not intervene. Meanwhile, the bill funding the federal government will expire at the end of March and the details of new legislation have not been worked out.

Tom Shoop, editor-in-chief of Government Executive, talks with WAMU's Morning Edition host Matt McCleskey about all of these moving parts. Here are some highlights: 

What all this means for federal agencies awaiting word about the possibility of deep cuts: "It's very unclear at this point where things are going to precisely end up, so they're in the same position as they were at the end of last year, kind of a holding pattern to see what might happen with their eventual funding," Shoop says.

Whether federal agencies are better or worse off than they were when the sequester was supposed to go into effect in January: "It's generally about the same. The sequester amount is reduced proportionally to where it was before," Shoop says. "It might be better in the sense that Congress has sort of tipped its hand that it doesn't really want to go through with the sequester if it can be avoided, so it seems less likely that the full sequester will go into effect."

How federal contractors, including many in the D.C. area, are affected by the uncertainty: "It means … a lack of knowledge as to where things are actually going to end up," Shoop says. "In addition, the debt limit fight is hanging over their heads too and if there's a default on government obligations, one of the things that might happen is that government could stop paying contractors at least temporarily, so there's that uncertainty as well." 

How federal employees are reacting to Republicans' contention that they won't rule out at least a partial government shutdown: "On the one hand, it's more uncertainty … on the other I think they're getting used to this as an ongoing means of doing business," Shoop says. "The thing to remember is that every time Congress has walked up to one of these cliffs, they haven't gone over, so you can sort of anticipate that there will be action of some sort, just not until the last minute." 

On the likelihood of a shutdown: "We avoided it every one of these last couple ones, so in that sense it's not that likely," Shoop says. "Although I think Republicans are going to continue to use it as a threat to try to get as much as they can in terms of spending cuts."

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