The probability is rising that Congress won't act to prevent the sequestration spending cuts taking effect at the start of next month. On paper, that would reduce spending by $110bn per year, equivalent to 0.7% of GDP, for nearly a decade. Even if Congress doesn't come up with a last minute deal to avoid the cuts, however, they are only likely to be in effect until a budget for fiscal year 2014 is agreed, hopefully sometime in May. If Congress can't agree on a budget deal, the sequestration will be a relatively minor problem, because the deadlock would probably trigger a government shutdown.
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