Could Next Looming Financial Crisis Affect You? [AUDIO]

A couple of months ago we were able to survive a brush with the fiscal cliff, but now, there's a new danger on the horizon, and it's called the sequester.

If Congress and the White House can't come to an over-arching agreement on spending reduction by March 1st, a series of automatic spending cuts will kick in, affecting everything from the Defense Department budget to the cost of food in your local supermarket.

Sequestration would slash funding for the military, the FBI, it would cut millions for food safety programs, which would increase the cost of beef and chicken, and it would also mean funding cuts for preschool and senior lunch programs, national parks, and the Transportation Security Administration would have its budget cut as well, which would create much longer airport security lines.

Additionally, some hurricane Sandy relief funds that have already been approved could be trimmed, and federal unemployment benefits would also be cut.

"It is entirely possible that the economy could be pushed into recession by virtue of these cuts" said Rutgers economist James Hughes.

He explained this budget reduction doomsday scenario was created a couple of years ago, deliberately, during failed efforts to bring the federal budget deficit under control.

"They set up the possibility of such painful, painful impacts of sequestering, that they would have to come together and make a decision or else people will blame one party or the other.  They made the cuts so horrible that they would do anything to avoid them being implemented," said Hughes.

So far no agreement has been reached, but Hughes believes the looming scenario is so bad, that national leaders will have to come together, and cut some kind of a spending reduction deal.  And if they don't?

"The consequences would just be devastating for the entire economy," said Hughes.