California, on Brink of Recovery, Braces for Setback on Federal Aid

New York Times

After years of ballooning budget deficits, California finally seemed on firmer footing. Unemployment remained high, but revenues and housing prices were up. Taxpayers even voted themselves a tax increase to bring deficits down. And then came the automatic federal budget cuts known as sequestration. As the $85 billion in spending cuts slowly roll out nationwide, California officials are girding themselves for a blow not only to the state's large military industry but also to its nascent economic recovery. Still, experts say, it will most likely slow down, though not derail, the state's economic growth.

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