Sequester and FAA Furloughs, Oh My!

rolls on hill

Rolls down hill… (image c/o gustav1911)

Using a number of patchwork solutions, proposition band-aids, and misaligned bi-partisan agreements the United States Government is still functioning. Through the tumultuous first two quarters of this year, America has seen a lot of financial turbulence while the financial markets try to make the most of a bad situation. Enter health care benefit changes and new requirements of the Patient Protection and Affordable Care Act.

According to an article in Credit Union Times, only 31% of credit unions surveyed by the CUNA Mutual Group are prepared to meet the requirements of the Acts of 2010 and only about 14% of the Affordable Care Act of 2012. These requirements involve non-discrimination rules concerning benefits for high paid employees, health coverage requirements for businesses to employees, and record keeping guidelines.

Businesses not in compliance with the new Affordable Care Act regulations can be accessed a penalty tax of up to $2,000 per employee in 2014. Compliance is mandatory and many businesses, not just credit unions and banks, are behind the eight ball. Many organizations are anticipating that there will be more changes in the tax code before year’s end. Many business owners are still holding out hope that the Act named after the President, Obamacare, will be repealed before the full effects are felt.

However, due to the effects of not acting on the sequester sooner, the FAA has already furloughed some Air Traffic Controllers in response to budget battles in the Congress and White House. Contention between the Republic Congress and the Democratic Cabinet caused budget cuts in many necessary services as a means to “hurt” both sides of the aisle into reaching agreements, but that plan has obviously failed and back fired on much of America’s middle and business classes.

The effects of the sequester are slowly being rolled out and making their way through the US economy. As the pain spreads throughout the system, more and more businesses that directly rely on government funds and subsidies will feel the impact; which is often felt hardest at the consumer level. Although the FAA furloughs affect business for the companies, the people impacted most are the Flight Controllers themselves and the travelers. Meaning the economy takes the hit, not the government.

What this all means for the common worker is that sh!* rolls down hill. As employers, ill-equipped and unprepared for the full impact of sequester, navigate the cuts; they are not preparing for the required changes in the health care element of their businesses. Even those that are preparing for the anticipated changes do not have all the details yet as changes to the tax code, the Act and the un-finalized governmental budget impact the results of the new regulations.

With so many ‘x-factors’ and unknowns, businesses are paying the cost of inaction in the US Government, which they have to pass on to the employees that form the base of their organizations. Employees who make up the spending segment of the economy. It looks dire for the US economy with no clear vision for the future.

Getting a wrangle on your finances has never been more important to your fiscal well-being than it is now. Although the future is unsure, consumers are still in need of goods and services. Employers are still hiring. Prepare by budgeting appropriately, finding a credit solution that can serve as a back up funding source any unexpected cost, and monitor your credit reports.

About Kevin Williams

Kevin works as a independent consultant, helping people improve their financial situations. The author has a BS and Masters along with years of experience with credit cards, techniques for improving individual credit and life.

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