Nonsequitur: Sequestration Special

February 21, 2013

The President proposed it, Congress voted for it, and the President signed it.  They can blame whomever they want, but they all own it.  (I assume they are aware of this.) For the rest of us …

The Center on Budget and Policy Priorities explains How the Across-the-Board Cuts in the Budget Control Act Will Work in accessible yet detailed language.  The bottom line:

The $984 billion in budget cuts is spread in  equal dollar amounts over each of the nine years 2013-2021, or $109.3 billion  per year.  Those cuts themselves are  divided equally between the “national defense” budget function and all other  budget functions: $54.7 billion per year in defense and $54.7 billion per year  in non-defense programs.

For perspective, you’ll find a breakdown of actual government spending here.  The federal government has spent over $3.5 trillion each year for the past four years.  So the ratio for the annual cuts would be approx. $109,000,000,000 to $3,500,000,000,000 or 109/3500 or 3%.

Sequestration would result in about a 3% cut in annual spending.

Now, because these cuts are not targeted, but “across the board,”  Sequestration would most likely result in a  “spending gap” triggering a temporary government shut down of non-essential services.  This would be the 18th time the US government has shut down since 1976.  (A good history of these can be found here.)

The longest shut down happened in 1996, lasted 21 days and furloughed 800K federal workers for that period.  Parks, museums, and monuments were closed.  Applications for visas, passports, as well as alcohol, tobacco, firearms, and explosives applications were not processed.  Services through the NIH, CDC, Superfund and Veteran’s Services were suspended.   About 20% of federal contractors were adversely affected by the shut down.

Sequestration would result in a temporary government “shut down” of non-essential services and furlough affected federal employees.

All this could have been avoided in 2010 when the President and Congress were negotiating the budget.  The White House organized a bi-partisan panel, chaired by Erskine Bowles and Alan Simpson, who proposed a fiscal plan for budget development and deficit reduction.  This proposal was rejected by the White House and not offered to Congress.  However, this panel is still active, and has presented a second approach to avoiding sequestration.

A balanced, bipartisan approach to budget development and deficit reduction has been made available to the President and Congress.

Will the President reconsider the Bowles-Simpson plan?  Is Congress willing to negotiate the tax-related elements of this plan (primarily closing loop holes)?  We will see.  But given that the President has spent trillion dollar deficits each year he has been president, and given that the Senate hasn’t even had a budget for the last 3+ years, it seems that their interest in responsible budgeting and fiscal management is not strong.

Some are saying that Sequestration may be the only way to reduce our deficits and begin to control our exploding debt.  After the “great shut down” of 1996, President Clinton and Congress were able to negotiate a balanced budget for 1997 and the next few years.  It would be nice to think that something positive could come out of this self-inflicted crisis.

7 Responses to “Nonsequitur: Sequestration Special”

  1. LeRoy Matthews said

    Study my Letter on (Search: Crazy Inbox)
    As I understand it, when Clinton left office, the so-called “National Debt” was about $5.7 Trillion. There WASN’T ANY BALANCED BUDGET!

  2. poliwogg said

    Great point. The US government uses some “creative” accounting methods. The federal budget was “balanced” for a few years under Clinton based on these methods. This means there was no DEFICIT for those years, due in part to a Social Security Tax surplus. But the National DEBT grew under Clinton and then grew even faster under Bush and Obama. (I’ll add a link to the posting for clarification.) Thanks for the comment.

  3. […] Sequestration would cut about 3% from the federal budget.  It seems that we can cover much of this by eliminating waste and duplication.  More details here. […]

  4. […] tax increase, income tax increase for “the rich,” raising the debt ceiling, etc.  Even the Sequester was Obama’s idea.  But with each one of these “wins,” the results have failed to […]

  5. […] the Sequester, and contrary to an administrative directive, the IRS is planning on paying out $70 Million in […]

  6. […] Moore of the Wall Street Journal reports that the Budget Sequestration has reduced the deficit and controlled the rising cost of […]

  7. […] and reduce the cost of governance, but that hasn’t happened since the days of Coolidge. The Sequester didn’t shrink spending – it just slowed growth of spending.) So the feds keep spending […]

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