It looks like the across the board spending reductions -- I'm not sure but I believe the "cuts" are reductions to the growth rates the discretionary spending was inherently growing. The underlying spending is growing due to the levels of budgets the agencies in charge were projecting and requesting.
Having said the above, the cut back in Federal spending in Q4 2012 taking GDP to a negative 1/10 of a point was attention getting. Can the US economy take this pull back of planned spending due to the sequester in stride and grow 2% or more in 2013? I think the spending cuts are about $85 bil a year. Before the Q4 result I would have said yes. I have to wonder now.
Looks to me like they will kick the can down the road again so the March 1 deadline is moot! They are putting bandaid on a gunshot wound and have to go after entitlements. All the other cuts are frivolous and for the most part are taken from the wrong areas!
Those sequester cuts don't bode well for market momentum now. Plus defense cuts, payroll taxes, strong $UUP$ all are going to hit IBM pps hard going forward. This rally of the past 4 years has started showing signs of exhaustion. Hedge Funds know that investing in IBM now means flat-funds at best for next several years and they all dislike such investments. Anemic organic growth as such and going down next does not bode well for this lofty pps here. Be careful.