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Budget Analyst: Sequestration Effects on Contractors Have 3-Year Lag

A budget analyst claims the automatic budget cuts scheduled for January would only affect 3.5 percent of weapons programs for the next fiscal year, Bloomberg reports.

Todd Harrison, a budget analyst with the Center for Strategic and Budgetary Assessments, said defense contractors would feel the full effect of sequestration cuts in three-to-four years because the cuts have a natural lag time.

According to David Lerman’s report, Harrison said in report released by the CSBA that 22 percent of defense procurement money is spent in the same year Congress authorizes it.

In an interview with Bloomberg Television’s Mark Crumpton, Harrison said contractors will be working on projects and activities where funding has already been obligated the day after sequestration takes effect.

Those programs are not subject to the automatic cuts, according to the report.

However, Harrison said 108,000 civilian Pentagon employees could lose their jobs within weeks of the sequestration cuts taking effect.

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