The tax side of that uncertainty has been largely addressed, but the spending cuts were merely postponed until the end of February.
Both Democrats and Republicans have said they’d like to address federal budget deficits through planned adjustments, rather than the automatic cuts – which would be divided equally between defense spending and a large swath of non-defense programs.
Budget experts tout the idea of a bipartisan accord, for example, that would focus on reforming entitlement programs, while dealing a less-severe hit to the economy in the form of sudden spending cuts. It’s far from clear, however, that the automatic spending cuts will be avoided.
Some economists say the economy, weak as it remains, could withstand the spending cuts contained in the sequester without entering recession. But they generally agree that the cuts, designed to total about $100 billion a year, would represent a substantial blow.