Cuts unlikely to deliver promised budget savings

On paper, there's one thing to like about the ugly spending cuts due to kick in on Friday: $85 billion in budget savings at a time when Washington continues to bleed red ink. In reality, the so-called "sequester" is likely to yield less than half that much in the short term.

In part, that has to do with the complex way the government handles its money. But it also reflects the probability that the spending cuts will hurt the economy, which in turn will lower tax revenue and drive up the costs of social safety-net programs like unemployment insurance.

On top of that, federal agencies - especially the Pentagon - will have to pay penalties to suppliers if the sequester forced them to cancel contracts.

Add it up, and the actual savings could be a lot less than budget hawks envision. Read more >>

Job crises ahead for "99ers"

Image by Jobs with Justice via FlickrIn 2010, an estimated 3.9 million unemployed Americans exhausted unemployment benefits, according to the National Employment Law Project, an advocacy group that campaigns for lower-wage workers.

More than 14 percent of the U.S. unemployed have been out of a job for 99 weeks, or longer. The Labor Department’s report on Friday showed that the unemployment rate climbed to a six-month high of 9.2 percent in June.

Many so-called "99ers" subsist on social services like food stamps and Medicaid, programs now in danger of deep cuts demanded by many Republicans in Congress in exchange for allowing the federal government to go deeper into debt.

"An increase in demand for social services is what you would expect in a downturn of this magnitude and so the fact that they are cutting the social safety net is quite perplexing," said Sylvia Allegretto, a labor economist at the University of California at Berkeley. "We've just never seen (long-term unemployment) at these levels, period."

Forty six percent of those looking for work have been jobless for six months or more and the average length of job searches that eventually result in a hiring has doubled to 10 weeks between 2007 and 2010. More...