"A family struggling to somehow stay afloat on the average weekly benefit of $289 — before the sequester reductions — is seeing its monthly payments cut by $172"
- Christine Owens, executive director of NELP
A fiscal policy adopted by the U.S. Congress that automatically will reduce the federal budget across most departments and agencies, also known as a "sequester", are expected to have a big impact on the U.S. long-term unemployment, as jobless people will have their federal jobless benefits shrink by almost 15%. More than 11 million Americans will feel their wallets getting even lighter, as starting from July 1, the average weekly benefits of $289 will drop by $43 a week, adding more pressure as the labour market is trying to find its bearings and generate more work places that would lead to a strong recovery.
In general, sequester cuts will total $1.2 trillion through fiscal year 2021, while during this year a 5.3% cut will be made, totalling $85 billion. At the same time, sequester will take a toll on education sector, cutting $1.7 billion from the education funding across the country. The federal government has issued all Head Start programs within the country to make a 5% budget cut. Even as recent tax hikes and budget cuts helped to reduce the national budget deficit, and had an incremental effect on the first-half growth, analysts are expressing their concerns that the full effect will be felt during the final six months of the year.
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