On March 1, 2013, federal agencies will see an across-the-board automatic spending reduction take effect. The initial cut of $85 billion will occur immediately and apply equally to defense and non-defense spending, with cuts totaling $1.2 trillion over a 10 year period. However, many large mandatory programs (such as Social Security, Medicaid, veterans benefits, and low-income services) are exempt from the cuts. As a result of these cuts, federal agencies may be forced to reprioritize, down-size projects and staff, and even terminate programs.
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