- Last Updated on Wednesday, 20 February 2013 11:16
- Published on Wednesday, 20 February 2013 11:16
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There is one common thread to the arguments that have been swirling around about the cuts in federal spending associated with sequestration. And that’s that, apparently, there is nothing anywhere, any place in the federal budget, that anyone thinks can be cut.
Sequestration, as a real prospect, has been in the news since the election and that’s given all of the lobbies, industries, unions, and associated state and local organizations a chance to mobilize. The military believes that any cut in spending will have immediate impacts on our national security. I guess $600 billion doesn’t buy what it used to.
Apparently, they are quite ready to talk about cutting support to soldiers, but questionable, big ticket weapons systems are off the table. I guess soldiers can’t hire lobbyists the way the big defense contractors can. And now, this week, after many months of not talking about sequestration, civilian agencies are weighing in about the impact of cuts in their agencies and departments.
Again, apparently, any cut will instantly result in closing the national parks and causing social security checks to be late or result in stoppages on major federal projects.
With all their drama, and the doom and gloom projections, they paint a frightening scenario. And, that, of course, is the idea behind it all. They want Congress, to one more time, delay the sequestration cuts.
However, do these arguments and dire predictions make any sense? The answer is no.
For one thing, the budget cut isn’t nearly as big as many would have you think. Out of a total budget of $3.5 trillion the sequestration requires cuts of roughly $50 billion from the military and $50 billion from the civilian agencies. It’s hard to make those cuts sound menacing.
However, in terms of operating budgets, for the remainder of the fiscal year, that’s roughly a seven percent cut. That will hurt, but in 1981, President Reagan implemented reductions in civilian spending, particularly at the Departments of Labor, Housing and Urban Development, Interior, Agriculture, Transportation, and Commerce, that were far more severe. But all of these departments continued to do their jobs. Perhaps they had to cut back on their tempo or some of their activities, but it didn’t force them to close their doors.
Similarly, in the early 1990s, when like now, we were moving from one era in national defense to another – then it was the end of the Cold War and now it’s the winding down of the wars in Afghanistan and Iraq – DoD faced significant cuts. In each case, the military dealt with the short term impact, and then adjusted its future plans to cope with the reduced budget.
Sadly, what’s happened is that the United States government, and this applies equally to Democrats and Republicans, has lost touch with the connection between raising money and spending money.
This is easily illustrated by a quick look at the deficit. The current shortfall between revenue and spending is $1.2 trillion. That means that roughly 1/3 of what we spend is paid for by debt. However, that number could, with sequestration, at least sound a little better. With the spending cuts from sequestration, combined with an increase in tax revenue, the deficit will drop below one trillion to about $870 billion. This may be hard to believe, but that’s the lowest it’s been in years.
Unfortunately, one of the problems with sequestration is that because Congress hasn’t been able to come to agreement on changes or reductions to the really big programs, to include the entitlement programs and the big ticket defense investments, the only place to go for this year’s cuts are the operating budgets.
This is personnel, training, travel, and relatively short term purchases. That’s going to hurt. DoD may have to cut training and deployments, at least for the next six months, and civilians throughout the government may have to be furloughed for a day or two each pay period through September. But, next year, with the departments able to plan for their reductions, since under the Budget Control Act, sequestration cuts occur each year over a period of ten years, the spending cuts could be more deliberate and less dramatic.
Sequestration isn’t the ideal way to cut the budget, but maybe, the cuts which everyone so dreads may force the departments and the Congress to do something that would only seem natural to any business or household. And that’s to start planning their budgets so that they can begin to live within their means. Maybe, as disruptive and stressful as sequestration may be to some, the cuts, may turn out to be a good idea after all.