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The U.S. «sequester» and its impact on the military industry

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President Obama’s  statement about moving forward in light of severe budget cuts that started to take effect today. 

Without the required agreement between Democrats and Republicans before the end of March 1,  across-the-board spending cuts officially went into place in the U.S. on March 2, 2013, although, after signing them,  President Barack Obama described the cuts as «dumb» and pressed Congress to work with him to halt a fiscal crisis and reach a compromise as soon as possible.

«The deep spending reductions known as the «sequester», which automatically kicked in,  obligue government departments and agencies to reduce a total of $85 billion between March 2 and October 1, 2013, the end of the present fiscal year, reductions that, as Obama said blaming it all to Republicans, will cause serious harm.

These cuts are not smart. They will hurt our economy and cost us jobs (750.000 in his own words). And Congress can turn them off at any time – as soon as both sides are willing to compromise.

Speaking for Republicans, John Boehner, House of Representatives speaker, replied that the tax increases the President keeps asking for already were passed at the end of last year. He added:

The discussion about revenue, in my view, is over. It’s about taking on the spending problem.

In his analysis for Reuters from Washington D.C., Matt Spetalnick divided the responsbility, if not equally, in much more equal terms than any of the parties involved have dared to recognice:

The Democratic president wants to close the fiscal gap with spending cuts and tax hikes – what he calls a «balanced approach.» But Republicans do not want to concede again on taxes after doing so in negotiations over the «fiscal cliff» at the New Year.

Ten days before the cuts -which, as Angel Ubide, at Petersen Institute, in Washington D.C, explained in National Radio of Spain, will take weeks or, even, months to have its full impact on economic growth and unemployment, and only if there is no earlier agreement- , with the help of graphics, explained on Feb 21st the cuts’ repercussions in the Defense sector:

The GOP is fighting to spare the Pentagon from $500 billion in cuts. Yet the across-the-board reductions will probably hit Democrats harder than Republicans. A look at the 20 districts that receive the most in defense contracts.

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