California May Not Feel Immediate Impact Of Federal Spending Cuts

SACRAMENTO, Calif. (AP) — Federal spending cuts are expected to dampen California’s economic recovery at a time when a housing rebound and job growth are gaining traction. But the immediate effect may not prove detrimental to the state’s economy.

The White House estimates that 64,000 civilian defense workers would be furloughed and 1,200 teaching and teacher aid jobs would be at risk in the state. But expected federal spending cuts, known as the “sequester,” will hit just a fraction of the state’s $2 trillion gross domestic product.

And most of the effects won’t be felt right away. Furloughs won’t start for a month due to notification requirements and members of Congress are considering giving agencies flexibility over cuts.

Also, some of the biggest drivers of federal spending, such as Social Security and Medicaid, are exempt.

Copyright 2013 The Associated Press.


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