Media Alert Feb. 26, 2013

UMD Business Faculty Available to Comment on Sequester Impact

COLLEGE PARK, Md. - Finance experts at the University of Maryland’s Robert H. Smith School of Business are available to comment on the looming budget sequestration. They can help explain the implications for both the regional and national economy, and they can provide perspective on the associated political wrangling in Washington.

Recently broken down by the White House in state-by-state impact projections, sequestration’s forced, across-the-board spending reductions would total $500 billion over 10 years, including $85 billion this fiscal year.

The Smith School houses a facility for live or taped interviews via fiber-optic line for television or multimedia content.

Economy to Suffer ‘Flesh Wound,’ Stagnation
Cliff Rossi, Tyser Teaching Fellow & Executive-in-Residence
Phone: 301-908-2536
Email: crossi@rhsmith@umd.edu

“Sequestration is imminent. The likelihood this time around for Congress and the Administration to come to a resolution before March 1 is remote. However, neither side is naïve, and any damaging effects from the budget cuts have likely been factored into the political calculus going forward. There will be a short time for the cuts to take hold, implying that their immediate effect on the economy may be a slight flesh wound rather than a deep laceration -- as many in the Administration have positioned. In the end, further 'mini-fiscal cliff' episodes will continue to hold back economic growth as financial markets detest this sort of political uncertainty.”

Defense Budget Impact: Timing Delay Offers Some Hope
Bill Longbrake, Executive-in-Residence
Phone: 301-405-9622
Email: wlongbrake@rhsmith.umd.edu

“The full brunt of defense cuts will take time to have impact because the Budget Control Act cuts spending authority, and actual spending lags budget authority. So, for a while defense spending won't decline much because it will depend on in-progress contracts authorized by spending authority granted in the past. This timing delay will give rise to the hope that the impact won't be great – that’s if the cuts in defense spending authority are reversed later this year through a deal that replaces sequestration.” Read more in Longbrake’s monthly newsletter.

About the Robert H. Smith School of Business
The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, MS in business, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.