The White House warns unless Congress acts, Michigan will painfully feel the effects of cuts to teachers, schools, job assistance programs, vaccines, food inspections, and furloughs to thousands of military employees.
But besides the White House, the federal government hasn't specified exactly how cuts will happen.
"It's not black and white right now. We don't know how much of the cuts are going to be absorbed at the federal level. We don't know how much are going to be passed down to the state level," said John Nixon, the State Budget Director and CPA. "The problem that we have right now is not knowing. The uncertainty is killing us and our biggest risk right now is the federal government and their inability to get things done."
Some cuts happen the moment the sequester goes into effect, but the real cuts won't be seen until after March 27. That's when Congress has to approve future funding.
"Continuing to kick the can down the road every few months, pushing our economy to the brink --while politicians wring their hands-- is a recipe for disaster." said Zack Pohl, the Executive Director of Progress Michigan, during a "Last Supper" roundtable on Thursday.
"Even though we are cutting a few dollars on the front end and I would say more than a few, the long term costs will be greater. An ounce of prevention is worth a pound of cure when it comes to health care. We are being penny-wise and pound-foolish," said Curtis Hertel, the Ingham County Register of Deeds, at the same roundtable.
The debacle between Republicans and Democrats which makes the sequester go into effect is alarming. The fighting is over cuts that will solve less than 10 percent of the country's financial problems. That is a more sobering thought.
"Everybody is tied up in the sequestration, $85 billion. We got a much bigger problem. You are running a trillion dollar annual deficit. The $85 billion--that's less than a 10 percent of what the annual budget deficit is," said Nixon.
Nixon said when Michigan faced serious economic challenges, the state made priorities and cut accordingly. That's not what the federal government is doing.
"The states have done this. The states have gotten good at living within their means--most states have to constitutionally they have to run a balanced budget," said Nixon. "I think the Federal Government could learn a lot from the states especially a state like Michigan. We came in, we reduced the budget and the world didn't end. There were some real impacts to real people but really you've got to look at prioritizing those and making sure that you're making the decisions the best way possible."
Governor Snyder agrees.
"If you look at it, many states including Michigan, had to deal with bigger cuts and challenges than they're facing and we did it by working together," said Governor Snyder. "Why can't they do it in Washington? Let's encourage them to do their job."
Whatever programs the federal government cuts as a result of the sequester, the state budget director says as a general rule Michigan will not make up the difference by substituting money from the state's general fund.
President Obama is scheduled to meet with congressional leaders Friday, the day the sequester begins.
The White House has made a list of what funding Michigan stands to lose after the sequester starts. The PDF can be found at the link below.