$1.2 trillion in automatic cuts might kick in

Remember the “sequester,” the automatic budget cuts that were supposed to go into effect on January 2 but were kicked down the road to March 1?  The result of last year’s agreement on the national debt and the recent “fiscal cliff” deliberations?  Since the cuts would hit Republican causes (the Pentagon) and Democratic causes (social programs) alike, it was assumed that Congress would get rid of them.  Well, it looks like they may go into effect after all.

From Lori Montgomery, in the Washington Post:

Less than a month after averting one fiscal crisis, Washington began bracing Tuesday for another, as lawmakers in both parties predicted that deep, across-the-board spending cuts would probably hit the Pentagon and other federal agencies on March 1.

An array of proposals are in the works to delay or replace the cuts. But party leaders say they see no clear path to compromise, particularly given a growing sentiment among Republicans to pocket the cuts and move on to larger battles over health and retirement spending.

Adding to the sense of inevitability is the belief that the cuts, known as the sequester, would improve the government’s bottom line without devastating the broader economy. Though the cuts would hamper economic growth, especially in the Washington region, the forecast is far less dire than with other recent fiscal deadlines, and financial markets are not pressing Washington to act.

Cuts to the military and the defense industry remain politically problematic. But Tuesday, even some of the Pentagon’s most fervent champions seemed resigned to the likelihood that the cuts would be permitted to kick in, at least temporarily. . . .

The sequester is a product of the 2011 fight over the national debt, when the new GOP House majority insisted on spending cuts equal in size to the increase in the federal debt limit. The result: spending caps that would force President Obama to slice $1 trillion from agency budgets over the next decade, along with $1.2 trillion in additional cuts that would hit automatically on Jan. 2, 2013, unless Congress agreed on a plan to replace them.

The sequester was designed to be abhorrent to both parties. With the exception of a few programs spared by Congress — including Medicaid, Medicare benefits and food stamps — every government account would be sliced by roughly the same amount. Many Republicans were queasy about a projected 9.4 percent reduction in military programs. And many Democrats were alarmed by the prospect of a 8.2 percent cut to Head Start, air-traffic-control operations and community development block grants.

via Deep spending cuts are likely, lawmakers say, with no deal on sequester in sight – The Washington Post.

Even while we might regret the defense department or other favorite programs that would be cut, wouldn’t this, in all honesty, be a good thing?  Our best prospect for actually cutting government spending?

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • SKPeterson

    Oh my, but this is telling:

    Though the cuts would hamper economic growth, especially in the Washington region, the forecast is far less dire than with other recent fiscal deadlines, and financial markets are not pressing Washington to act.

  • NavyChaps

    When the President and his team came up with the idea for Sequestration, he assumed that since Republicans actually care about national defense, they would not allow the cuts to occur and would thus capitulate to Democrat demands (and given past history, not an illogical thought).

    But the harsh reality of math has caused some of the more Defense oriented Republicans to be willing to accept the cuts of Sequestration if only to finally start reducing the insane spending spree.

    The critical problem with Sequestration is that it doesn’t touch the actual drivers of our financial problems – entitlements. Until they deal with that, we are rearranging deck chairs on the Titanic.

    As to the effects of Sequestration, our briefings within the military indicate that there will be very serious degradations to our ability to fulfill our basic missions. Ships won’t be able to go to sea. Planes won’t be able to fly. Ground troops won’t be able to go to the field (yes, there are substantial costs even to that) or do weapons training. Some current operations will be curtailed. Future operations will be cancelled. If a crisis comes, it will take weeks to months to be able to respond. Even our very liberal SECDEF has indicated that the cuts will be devastating.

    As one who is directly affected by these cuts, I must say that I find it unconscionable that it is considered “equitable” when Defense takes half the cuts. Especially considering that non-entitlement welfare spending is nearly double the DoD budget.

    Interestingly, some local analysis in the Norfolk, VA area shows that Sequestration will cause the loss of 26,000 jobs – mostly the contractors doing repair work on ships. And then there are the secondary and tertiary effects and lost jobs that will follow. Given the jobless recovery that we are already experiencing, this will be a further challenge for the unemployed. And that is just here.

    But is Sequestration the right thing to do at this point? Is it the only way to reign in those who keep running out of other people’s money? Sadly, yes. I don’t think there is enough responsibility within our elected leaders to do the hard work that must be done and address the real problem (entitlements). They would rather rearrange the deck chairs.

    But given the impact on Defense, you better be praying that the bad actors in the world who seek us harm find a VW and get happy.

  • rlewer

    Is either side serious about balancing the budget?

  • Joe

    Sequestration is not cutting anything from any where. It is a reduction in the planned INCREASE in spending. In fact, under sequestration spending will increase year-over-year, every year, in every department that is getting “cut.” The increased spending will be at about 1.5% over the prior years budget. So, in 2013 the DoD will get 1.5% more money than it is getting in 2012.

    The bill is come due, figure out how to do more with less. That is what the rest of us are doing and so must gov’t – including the Pentagon. If can’t fathom a way to make the military more efficient, then you have been in it too long.

  • DonS

    Yes, Joe @ 4 is right. The political and media establishment habitually mislabel reductions in planned spending increases as “cuts”. There are no real cuts. Of course, on the other side of the coin, the tax increases are very real. And immediate.

    Unless a comprehensive spending plan can be negotiated to bring the budget into ultimate balance (this will not happen during the Obama administration), sequestration must be allowed to occur. It needs to be extended to entitlement programs as well. Since there is no will to do what is necessary to ensure that our kids do not wallow in the muck left by our irresponsibility, the easiest thing to do would be to impose, each year, a 5% cut across the board until the budget is balanced. Alternatively, we could impose the 2007 federal budget and have an immediate $100 billion surplus. Would that really be so bad?

  • DonS

    Here’s an article that puts the point Joe and I were making @ 4 and 5 in perspective: http://news.investors.com/ibd-editorials-perspective/013113-642705-federal-fiscal-austerity-is-a-myth.htm

    Note that in FY2007, federal spending was $2.8 trillion. In FY2013, it will be $3.6 trillion with the sequester! That is an increase of 29% in six years, almost 5% per year, during a massive recession when total GDP will only increase about 13% (from $14.1 trillion in FY 2007 to about $15.9 trillion in FY 2013).

  • SAL

    The Chief of Staff of the Army has indicated that we have a 17-19 billion dollar shortfall this year in Operations and Maintenance funding. Until Congress passes a budget that takes this into account, the Army is prohibited from shifting money around to protect our ability to fight.

    So if Sequestration happens it is expected that we will rapidly be unable to deploy troops in case of an emergency. Our instructions have been that we shift to a 32 hour week, cancel all training and travel and cancel all maintenance of equipment not currently deployed. The cost to bring back our readiness levels is estimated to be many times more than the savings from sequestration. It’s also a general rule that for every month we forgo funding maintenance and training it takes another three months to catch up once funding is restored.

    Estimates are that Sequestration will cost ~ 1 million jobs in the next year or two. That may get Congress’s attention. What matters more is that without a budget the services will have to cannabilize their forces because of legal restrictions on shifting funds around to save some fightign ability.

    This indescriminant destruction of our military force is estimated to be many times worse than what caused Task Force Smith. If we ever have another war prepare for massive casualties and deaths as our troops fight without adequate or quality supplies.

    So Sequestration without a budget that remedies it’s cuts to readiness is only a good idea if we don’t intend on ever having to use our troops in combat again.

  • kerner

    SAL:

    I don’t doubt your sincerety, but I have to add that I as a taxpayer am sick to death of government agencies loudly bemoaning that they cannot do exactly what they are now doing, and just as well, if they get less money. And yes, the military is a government agency.

    We just went through this in Wisconsin, with every single government labor organization crying that the sky would fall if they got a little less money. Well, they got less money. And they absorbed it by requiring the employees to pay more for some of the benefits they receive. In other words, every worker got a little less money, but they all kept working 40 hours per week. But now our budget is balanced and the wheels of government have kept right on turning.

    As far as supplies and equipment maintenance goes, less money means no more or less that deciding what we really need and what we don’t. Are you really claiming that there ae no unnecessary purchases in the defense budget? Are you really saying that defense contractors would all go out of business if they had to fulfill their contracts for a little less money? I don’t know enough about this to be all that specific without doing a lot of research, but I am very hard pressed to believe that there is no fat in the DOD budget that couldn’t be eliminated without significantly reducing combat readiness.

    It seems to be a sad fact of life that the only way to get the government, or any part of the government, to spend money more efficiently is to give the government less money.

  • kerner

    But I strongly agree with you about one thing. Maybe this will motivate Congress to pass a budget to go with the cuts.


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