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Analysis: The big U.S. budget cuts - Will the bite match the bark?

White House press secretary Jay Carney speaks to reporters about the so-called "sequester" at the White House in Washington February 28, 201
White House press secretary Jay Carney speaks to reporters about the so-called "sequester" at the White House in Washington February 28, 201

By Fred Barbash

WASHINGTON (Reuters) - Delays of four hours or more at airports. Exasperating wait times for people, and goods, crossing America's borders.

Reduced paychecks for thousands of civilians employed by the Pentagon. The U.S. Coast Guard, crippled in its patrols of U.S. waters.

Meat shortages, thanks to cutbacks in food inspections. Teachers of low-income children and special-education students losing their jobs.

These are just samples of the possible consequences of impending across-the-board U.S. government budget cuts as described by officials in President Barack Obama's administration.

About the only thing missing is the closing of Washington's popular Smithsonian museums, often the first casualty of past budget battles. A spokeswoman said they would remain on normal hours and achieve their savings by reducing or halting construction projects.

No one doubts that cutting $85 billion in federal programs under the automatic "sequestration" cuts scheduled to take effect at 11:59 p.m. on Friday (0459 GMT Saturday) will hamper the services they provide. The International Monetary Fund warned the cuts could slow the U.S. and world economies.

But the precision of the predictions from Cabinet officials at White House briefings has become a source of political controversy. Obama's press secretary, Jay Carney, spent much of Thursday's briefing fending off reporters' suggestions the administration was exaggerating, a sign perhaps of the risk the White House is taking by making the forecasts.

"There are going to be delays as a result of a reduction in man-hours and personnel among our air-traffic controllers," Carney said. "That's a fact. And I hope you keep that in mind when you're on your next commercial flight, and you're delayed if that does, in fact, come into effect."

But at congressional hearings, officials have acknowledged less certainty and more nuance than reflected in worst-case scenarios at the White House.

"The Coast Guard will reduce its presence in the Arctic by a third," Homeland Security Secretary Janet Napolitano declared at a White House briefing on Monday. "We will curtail our air and surface operations by more than 25 percent, affecting management of the nation's waterways, as well as fisheries enforcement, drug interdiction and migrant interdiction."

But a day later, Vice Admiral Peter Neffenger, deputy Coast Guard commandant for operations, told a House of Representatives subcommittee that such "front-line operations" would be the "last place that I will go for cuts."

Jason Furman, special assistant to Obama for economic policy, told a briefing on Monday that the numbers provided were based on past experience with cutbacks and were "scrubbed" to be as accurate as possible.

But he added: "In some cases it could be a little better. In some cases, it could be a little worse, depending on how you reprioritize your money."

The full brunt of the automatic cuts will be borne over seven months and Congress can stop them at any time if the two parties agrees on how to do so.

SAFETY NET UNTOUCHED

The amount of money being cut is indeed significant: roughly $85 billion from about 30 percent of the programs funded by the government. The sequestration plan enacted by Congress in August 2011 left the rest of the $3.7 trillion U.S. budget untouched, including the Social Security program for retirees and the Medicare and Medicaid health insurance programs for seniors and the poor.

The cuts are "across-the-board," compared with normal budget procedures. Congress said a certain, roughly equivalent, amount had to be lopped off thousands of programs instead of making program-by-program choices.

White House budget officials say the cuts are roughly 9 percent for non-defense spending and 13 percent for defense.

But the White House budget office may be able to provide a little wiggle room for agencies as it crafts the order implementing the cuts.

Congress was also not quite as "indiscriminate" as described. In addition to avoiding the big safety-net programs, Congress built in other exemptions, including money for U.S. troops, the Veterans Administration, Pell Grants for college students and big chunks of the budget of the U.S. Department of Transportation.

Those exemptions are creating their own problems.

With many Transportation Department programs exempt from the cuts, a disproportionate burden is falling on those that are not, such as the country's air-traffic control system operated by the Federal Aviation Administration.

Michael Huerta, FAA administrator, told the House Transportation Committee on Wednesday that the FAA would absorb more than 60 percent of the transportation cuts even though it consumed only 20 percent of the department's budget.

That means possible furloughs - unpaid involuntary days off - for air-traffic controllers, which in turn could result in the closing of smaller control towers and limiting hours at others.

Huerta also told the committee he was unable at this point to determine the impact on the nation's busiest airports with any precision because he was still "in discussions" with labor unions and the airline industry to try to "understand the operating characteristics of particular locations."

The possibilities? Chicago's O'Hare International Airport has two control towers, he said, and if air-traffic controllers are in shorter supply, it may be that one will have to close when the weather gets bad. That would remove an entire runway from operation, he said.

All agency and military officials say the impact will depend on how long the cuts last.

John Pistole, head of the Transportation Security Administration, which screens travelers and manages the air marshal program, testified to a House appropriations subcommittee that he had already placed a freeze on hiring.

Officials will try to get by with that as long as possible, he said, then curtail overtime and then, if necessary, resort to furloughs.

MILITARY TO FEEL THE BRUNT

The military will be the hardest hit.

Congress divided the sequester into half non-defense categories and half defense, the idea being that heavy cuts in defense would help ensure Congress came up with an alternative.

Heidi Shyu, assistant secretary of the Army for acquisition, logistics and technology, told a House committee on Friday the Army would absorb a reduction of $3 billion in procurement accounts that would affect 400 Army programs.

That could produce a cascade of cutbacks.

Some of the Defense Department's high-performance computing centers may be closed entirely, she said. Grants to universities and other research institutions will be cut. Civilians involved in contracting, program management and cost control "will be potentially subject to a 22-day furlough."

Production of new Chinook and Apache helicopters, both made by Boeing, will be slowed or halted, she said.

The impact on military-related activities will not stop there. Communities that house military bases face significant cutbacks in "impact aid" from the Department of Education, according to Education Secretary Arne Duncan.

He said sequestration would eliminate about $60 million from the $1.2 billion in funds for schools near bases. A particularly hard-hit community, he told the Senate Appropriations Committee, would be Killeen, Texas, home of the Army's huge Fort Hood base, about 160 miles south of Dallas.

That may not get much attention outside Texas. But the expected cancellation of shows by the Navy's renowned Blue Angels flight demonstration squadron because of the cuts will be felt by millions of fans across the country.

(This story corrects location of Fort Hood to south of Dallas, not north, in second to last paragraph)

(Editing by Peter Cooney)

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