Sequestration a secondary issue to budget talks

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.