WASHINGTON -- With just a few days to go before new government spending cuts are set to take effect, what are the chances that another eleventh-hour action will avert the latest impending hit to the economy?
Very little, according to a survey of economists released Monday by the National Assn. for Business Economics. The group said that nearly 60% of economists now expect the so-called sequestration, which will slice about $85 billion from the federal budget, to begin March 1 in full or partial form.
The survey of 49 professional economists, representing industry, government and universities, indicates that experts don't see a recession scenario as a result of the new spending cuts, as they did the "fiscal cliff" of tax increases and fiscal reductions, which were mostly avoided at the last minute at the start of this year.
More than half of these economists predicted that the effects of sequestration and other budget uncertainties would shave economic growth by less than half a percentage point this year. Another one-third said the pain would be greater, with real gross domestic product, or total economic output, sliced by up to a full percentage point.