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New Study Reveals How Federal Budget Cuts Affect Mass.

moneyHADLEY, Mass (WGGB) –When automatic federal budget cuts, or the Sequester went into effect earlier this year, it affected a variety of areas, from Head Start, to the military, to Medicare reimbursements.

Many government workers braced themselves for the effect they’d have.

Thanks to a new study by UMass’ Donahue Institute, that picture has gotten a lot clearer. “The state has been so successful in particular with the NIH grants, science foundation grants, the defense sector here in Massachusetts. Over $11 billion goes to defense contracts. So it’s a big deal for the state,” said Daniel Hodge, the Institute’s Economic and Public Policy Director.

Hodge found that more than $1.3 billion has been slashed from Massachusetts which creates a domino effect.

Nearly 14,000 jobs were lost in the state alone for federal fiscal year 2013 alone.

The cuts didn’t just affect government employees, but private, and non-profit organizations.  “The less spending and income people have, the less likely they are to spend and go out. It hurts retail trade, restaurants, leisure, A whole bunch of other industries,” Hodge added.

The study also estimates more than 12,000 jobs will be lost in fiscal year 2014. “People can manage w/ith one year, short term cuts, but not a new, lower reality in terms of spending,” stated Hodge.

Earlier today, congress passed a bill to ease those spending cuts, but Hodge says it doesn’t fix everything, since the sequester’s effects could be felt into 2021.

  • TheScottishWeasel

    Please cut the BS about how bad the sequester hurt us. The sequester was a big joke to give government employees a paid vacation. Nobody lost any income since the gov paid all the employees for doing nothing, and nobody went broke or out of business. The sequester was just a big joke to rip us off.

  • TheScottishWeasel

    The “non-essential” employees (there is an oxymoron for ya!) that were vacationed, oh I mean “furloughed” should have had to go collect unemployment just like anyone else would. It would be a good lesson for them on what it is like dealing with the unemployment boobs. That is one joke that has turned into an even bigger joke since they “improved and upgraded services” 6 or more months ago. They should have collected just like we would if our company shut down for two weeks.