The dreaded sequestration deadline has arrived, and with it $85 billion in automatic spending cuts that could plunge the nation's strengthening economy back into the depths of recession.
(For some light reading on the topic, check out the 394-page Office of Management and Budget report.)
But contrary to many media reports, the majority of spending cuts will be felt most acutely in the federal government's hometown: Washington, D.C., a region that, ironically, suffered the least in the economic downturn.
While most of the rest of the country's housing market suffered during the recession—with foreclosures becoming the rule instead of the exception—the Beltway has had one of the strongest housing markets in the country.
Having visited the area during the economic crisis, it always struck me as odd how little suffering there seemed to be there compared to the rest of the nation, and in particular Detroit, Arizona, Las Vegas, and of course Florida.
But with so many federal workers living in and around our nation's capitol, those federal spending cuts will eventually translate to job cuts, unpaid mortgages and … well we all know how that story has gone.
In short, there's some belt tightening on the way for many of those inside the Beltway.
That's not to say others around the country won't be impacted. Earlier this month, HUD Secretary Shaun Donovan warned if the cuts go forward, the Federal Housing Administration won't be able to help those trying to dig their way out of foreclosures, purchase a home, and generally stabilize the housing market.
To add insult to injury, the banks actually benefit from the dark cloud sequestration is casting over the nation. The same federal regulators whose job it is to help set up and enforce Wall Street reforms, also known as Dodd-Frank legislation, may find themselves hampered by budgetary constraints. More than a year after the law was passed, just one-third of the nearly 400 rules mandated by this legislation have be finalized. If you think those regulations have been slow to come so far, just wait until after March 1.
It seems not only have the banks become too big to fail and too big to jail, but now with the threat of sequestration, they may have become too big to properly regulate.
- Opinion: Republicans Are Losing the Sequestration Battle
- View: A Collection of Political Cartoons on Sequestration, Fiscal Cliff
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Real estate attorney Roy Oppenheim left Wall Street for Main Street, founding Oppenheim Law with his wife in 1989 in Fort Lauderdale, Fla. He is vice president of Weston Title and creator of the South Florida Law Blog, named the best business and technology blog by the South Florida Sun-Sentinel. Follow Roy on Twitter at @OpLaw or like Oppenheim Law on Facebook.