US President Barack Obama has urged Congress to take action to avoid deep spending cuts due to begin on Friday.
Speaking at a shipyard in the state of Virginia, he warned the defence industry would be hit especially hard.
The US Navy has already told suppliers it would be forced to cancel future contracts if the cuts go through.
The US immigration and customs agency has meanwhile begun to release illegal immigrants from jails, as a result of the looming budget cuts.
Noting current "fiscal uncertainty", the US Immigration and Customs Enforcement agency said hundreds of illegal immigrants had been "placed on an appropriate, more cost-effective form of supervised release".
On Monday, Homeland Security Secretary Janet Napolitano warned the cuts would hit her department's core programmes - including border and airport security.