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Sequestration's Potential Impact on California



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(Sacramento, CA)
Monday, February 25, 2013

There are two ways sequestration could affect California: direct federal spending cuts of about $4 billion; and the reaction to those cuts from the state's people and businesses.  Jason Sisney with California's non-partisan Legislative Analyst's Office says the state's economic growth will likely slow from about two percent to 1.5 percent.

Sisney: "Now, that's just from the spending alone.  If sequestration causes businesses and consumers to become less confident, (if) it causes the stock market to decline, then the effects could be even greater."

Specific regions and industries would be particularly hurt, such as San Diego's military community.  Sequestration would lead to more than $3 billion in California defense cuts.

The greater the impact, the greater the loss of revenue - which could lead to a state budget deficit.

Note: Here's the White House list of specific sequestration cuts to California.

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