From Bernanke's Testimony:
However, a substantial portion of the recent progress in lowering the
deficit has been concentrated in near-term budget changes, which, taken
together, could create a significant headwind for the economic recovery.
The CBO estimates that deficit-reduction policies in current law will
slow the pace of real GDP growth by about 1-1/2 percentage points this
year, relative to what it would have been otherwise. A significant
portion of this effect is related to the automatic spending
sequestration that is scheduled to begin on March 1, which, according to
the CBO's estimates, will contribute about 0.6 percentage point to the
fiscal drag on economic growth this year. Given the still-moderate
underlying pace of economic growth, this additional near-term burden on
the recovery is significant. Moreover, besides having adverse effects on
jobs and incomes, a slower recovery would lead to less actual deficit
reduction in the short run for any given set of fiscal actions.
Nothing new to readers of this blog, but always good to hear someone in Washington actually making some factual sense.