Budget Uncertainties Provoke Panic In Defense Sector (From Forbes)

As the clock ticks down to the January 2 deadline when automatic spending cuts are due to be triggered by last year’s Budget Control Act, people in the defense sector are getting edgy. With little progress in Congress to avert sequestration likely before November elections, there will only be a couple of months to address a host of pressing budget issues in the lame-duck session. However, that doesn’t mean sequestration is inevitable. In fact, it’s downright unlikely if one or the other party manages to sweep the elections, because both parties hate the idea of across-the-board cuts to their favorite programs. Even if the elections produce a split decision, there’s a real possibility that deferring sequestration is one issue where bipartisan agreement is feasible. Beyond that, the near-term impact of automatic spending cuts on defense is likely to be more modest than many observers fear, due to the slow rate at which annual budget authorizations are actually spent. I have written a commentary for Forbes that you can read here.