Automatic Budget Cuts Could Cause 1 Million Layoffs

Former officials say November layoffs at companies that depend on massive government contracts could shake up the election

Hundreds of thousands of Americans could head to the polls in November with fresh pink slips from firms that do business with the federal government, potentially upending key races across the country.

If Congress fails to pass a broad debt-reduction package this year that would reduce the federal debt by $1.2 trillion, around $500 billion in separate cuts to defense and domestic entitlement budgets would go into effect Jan. 1. The impact would force government entities like the Pentagon to cancel contracts, lay off workers and terminate programs, experts of all political stripes agree.

The Bipartisan Policy Center, in a report released Thursday, predicts the result would be a fresh injection of unemployed Americans into the still-staggering U.S. economy.