Federal Budget Cuts

What might happen if the budget cuts go through?

From military training to educational grants to border patrols to hurricane relief, federal agencies face $85 billion in automatic, government-wide spending cuts this year. It was part of a $1.2 trillion deal struck by Congress and signed by President Barack Obama in 2011 to extend U.S. borrowing authority and cut the deficit….

In education, those cuts could mean $725 million less for a program that allocates funding to districts and schools with high percentages of lower income students, Education Secretary Arne Duncan told lawmakers Thursday.

It also could mean cutting funding to 70,000 low-income children who rely on Head Start for early childhood education programs. It might mean fewer teachers and staff, larger class sizes, less tutoring and higher unemployment, Duncan said, adding that he considered such cuts “morally indefensible.”

“The most vulnerable students will be hurt the most,” Duncan said.

Duncan, along with Office of Management and Budget Federal Controller Daniel Werfel, Housing and Urban Development Secretary Shaun Donovan and Deputy Defense Secretary Ashton Carter testified before the Senate Appropriations Committee on the impact of the proposed cuts.

Earlier this week, Homeland Security Secretary Janet Napolitano sent a letter to lawmakers saying sequester cuts could mean a potential cut in border patrol agents; difficulties for Immigration and Customs Enforcement in sustaining current detention and removal operations; increased passenger wait times at airports; reduced Federal Emergency Management Agency funding: furloughs, and more.

Donovan testified that Hurricane Sandy recovery efforts, the Federal Housing Administration’s ability to process loans and tens of thousands of jobs could all be affected.

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  • Robin

    For perspective, these cuts represent a 5% cut in discretionary spending. Discretionary spending has increased by 13% since President Obama took over. So even under this doomsday scenario discretionary spending will still be higher than it was when George Bush left office.

  • Richard

    Robin, #1

    Those might be accurate numbers but much of the discretionary spending you’re referring to are ‘automatic stabilizers’ that would kick in no matter who is president. When unemployment goes up, the number of food stamp recipients, etc will increase also in order to alleviate the impact of economic slow-down.

    The point of this post is that these cuts are going to be cuts to bone and muscle among those who are suffering in this economy instead of cutting fat from those that have the weight to spare (i.e. corporate tax breaks, wall street traders, Goldman Sachs, etc).

  • Andrew

    Discretionary spending is not what’s driving the debt. It’s the military and Medicare that are the big run-away money burners. The Budget Control Act already put annual caps on discretionary spending that will ensure that is under control; now we just have to means-test Medicare and SS, increase the retirement age by a couple of years, and cut the bloated DOD budget. Plus eliminate some wasteful deductions/tax policies, like carried interest and reform the home mortgage deduction.
    The U.S. could enact common-sense reforms that would address the debt problem, but Republicans want to ignore the drivers and use the argument to slice social spending for ideological purposes. Democrats are more pragmatic but much of their caucus needs to accept the notion that entitlements can’t be off-limits.

  • James Neely

    Richard #2
    Obama’s plan is working! I am 86 years old and I have seen this type of “the sky is falling” reproduced over and over (independent of whoever is in office). Instead of doing a credible job of seeing where things can be cut, they pick the most heart-rending items and put them out to generate as much opposition as possible.
    Yes the military budget is large. Yes it could be reduced, but yes that is buying us (FREEDOM) something that we must have as a fundamental basis for all the other goodies that the entitlement society wants. As expensive as it is, it has successfully done the job for over 200 years; what other government program can you point to with that kind of record.

  • Bob

    Merciful Minerva: makes these birds live with their decisions. They are not “cuts”, but curtailments of what they had hoped to push down our throats.


  • Andrew

    James, I’m sorry but your comment betrays a general lack of knowledge concerning the billions in waste at DOD. To equate all of the money being spent as giving us “freedom” is completely erroneous, especially since the “war on terror” in which defense contractors got billions in goodies from their buddies in DC . .with no strings attached or proper oversight. There are currently BILLIONS completely unaccounted for. Look at this report produced by Republican Senator Grassley’s office . . the DOD can’t even produce accounting records of where their money is going!!! http://www.grassley.senate.gov/about/upload/Defense-09-15-10-Oversight-Review-of-OIG-Audit.pdf
    For far too long money allocated to defense was given a free pass and no-one paid attention to where the money was going b/c it was a political sacred cow. That time has long past and DOD contractors represent much more of an “entitlement society” than poor people in the inner city on food stamps.

  • Mark E. Smith

    I could be mistaken, but they aren’t budget cuts. The rate of growth is being slowed. If that’s true, then talk of “budget cuts” is simply a scare tactic.

  • Dana Ames

    Well, what I know is that my husband’s pay has been frozen for more than 3 years, and Congress just voted themselves a raise. He gets a minimal COLA, that’s all; his pay scale hasn’t moved. He’s one of those people that makes sure that Federal lands and campsites are open and usable for everyone. He’s just received notice that he might have to go on mandatory furlough if the cuts go through. Translation: you will not be allowed to come to work, and you will not be paid for the time you stay home. How is something like that, repeated among the many federal employees who basically keep the infrastructure going, going to help the economy recover?

    In general, I agree with Andrew. I have a daughter in the Army. Her fiance, in the Marines, has to buy his own body armor to take on his deployments, because what is provided him is substandard, while nobody is doing anything about the wastage in paying contractors more money for what the military used to do better.

    And as far as I know, none of the orchestrators of the financial crisis has yet gone to jail or had to pay restitution for the damage they caused. And so far, what has been proposed to corral the financial industry is a shadow of the former regulations.

    I changed my voter registration to “decline to state” years ago, because I’m really fed up with both parties (although at this point the Republicans are being insanely obstreperous). I’ve not heard of very many in Congress who really want to solve the problems, and most of them have retired in frustration. I’ve heard radio interviews in the past few days describing how congressional work hours are about half what they were 40 years ago, and how our representatives have to spend so much time fundraising for their next election that there’s not much time left over to do the actual work of legislating, even with the fewer work hours. What’s “broken” in the government is not really the spending habits; it’s tunnel vision and stranglehold ideologies and fear and greed.

    End of rant.


  • AHH

    Mark @7,

    You are actually mistaken; for the most part this sequestration (unlike some alleged cuts in the past) is “real” cuts rather than just scaling back growth.

    For most government departments, the Fiscal 2013 budget is on a “continuing resolution” which sets the spending at the same level as it was in Fiscal 2012. I seem to recall that some budgets got increased by a percent or two for some reason. So these cuts of 5% or 7% or whatever mean agencies will have several percent less to spend in Fiscal 2013 than they did in Fiscal 2012 (and the cuts look a little bigger when inflation is factored in). And since this will come almost halfway through the Fiscal year (which started October 1), the cuts get crammed into a shorter time frame. Most agencies will do “easy” things first like hiring freezes and curtailing contracting and putting off building maintenance; some will have to put employees (whose salaries have already been frozen for I think 3 years) on “furlough” (unpaid time off) for maybe 10 days out of the rest of Fiscal 2013.

  • Joe Canner

    Andrew #6: Too illustrate your point with some specifics: I have a friend who works for the DoD. He says that his office has to allocate $350K per contractor-year. I’m not sure whether this illustrates how outrageous contractor costs are or whether it illustrates how many hidden costs (fringe benefits, security clearances, etc.) there are for DoD employees. (Probably some of both.) Sequestration might have the unintended but necessary benefit of helping both DoD and its contractors to come to grips with what they really need to do their work.

    Incidentally, my friend’s agency has committed to no layoffs and no furloughs; instead they will cut operating expenses and contractors. It will be interesting to see if anyone notices the difference.

  • Scott, continuing to pray protection over our country and government!

  • Joshua

    Since the DOD budget is a hot topic, I think I should weigh in. One of the reigning cliches that act as a substitute for deep-thinking on our DOD budget is “We can’t negotiate from a position of weakness”; which is true, but overlooks the obvious. We spend a quarter of what we spend now and we would still be spending more money than any other nation on earth. Not to mention, most of the other nations that even come close (well, no one comes close by a long shot, but closER) are our allies. If, as standard GOP rhetoric goes, waste is inherent in government, then this logically includes our DOD as well. Most of the money does not in fact go to actual troops. Most goes to paying for weapons systems that we don’t need, for wars we are not fighting, against enemies that don’t actually exist.

  • nate s.

    i’m okay with it. most of the examples up there are failed or failing programs anyway. i agree that most of the debt comes from some of the bigger budget items (ie. military, medicare/cade/affordable care act, etc) but that doesn’t mean that they don’t need to make cuts also. it’s not unreasonable to look at this the same way you would if this was a home budget, which means when you have the debt the US gov’t has, cuts happen everywhere. you make a point of turning lights off when it’s bright outside to lower your electricity budget, you eat more of the same broccoli so you can buy it in bulk instead of a variety of vegetables to lower the grocery budget, you walk more and drive less because you might not be able to lower your car payment, but you can lower your gas budget, etc. and certainly, and perhaps more importantly, you CUT UP YOUR CREDIT CARDS!! which means, no, we shouldn’t raise the debt ceiling. more debt (at this point) won’t help get out of debt. so yeah, i think sequester isn’t perfect, but it’s at least a cut. now if we can just continue that process and make real cuts to the ‘big ones’.

  • TJJ

    This is a purely political “crisis”, created by politicians, and one that can be solved by popitocians whenever they really want to do so. Both sides are to blame, maybe not fully equally, but equally enough that finger pointing and blame gaming is disingenuous for either side. The cut numbers are actually quit small given the deficits we are running up, and the way the cuts will be made is wholly and totally in the hands of the politicians. Right now it will be a blunt hammer instead of sugical and strategic, unless something changes because that is how both sides want it to be.

  • Beltway Hobbit

    Many people don’t realize how good we really have it over here in the United States. I love my country and Constitution deeply, and hold up our government in high esteem. However, the problem is that we do not have a middle ground today, and instead have people on both extremes calling the shots.

    What taught me to deeply appreciate the United States, our culture, freedom, government, and way of life came about from working in Kabul, Afghanistan for a couple of weeks a few years back. Those who criticize the US really don’t know how good they have it here. Watching a struggling foreign government abroad taught me to more treasure my own. We have a strong justice system, laws in place to protect the weak, military and even environmental laws in place. In Kabul I learned that even safety is an American value and unique to our country. In Kabul one couldn’t walk down the street easily or without the threat of blatant crime. Then there is the air quality, lead based gasoline fumes that you taste in the back of your throat because of terrible air quality. Even the air quality in the United States is something that so many take for granted.

    Sequestration is bad politics. It’s like watching a person commit suicide. I’ve worked and come to know many in the military. And I have the deepest respect for them; I wish more civilians had that opportunity. It angers me as to how this budgetary debacle is affecting them. The truth of the matter is that that you can gut defense, cut back discretionary spending and not even get at the heart of the matter hurting our country. This real issue is social security. More people are withdrawing from it than paying into it. Social security and Medicare need to be thought of as a threat to our national security in how they are playing out. By refusing to change and re-evaluate the programs so that future generations have them we are putting this country on unstable ground.

    Most people don’t realize how involved the government is in their life. From jobs, to passports, to security when traveling, etc… All that will be affected by sequestration. As for me I don’t know what is happening…furlough guidance hasn’t been issued yet, though friends of mine have received furlough notices. I’m expecting to be furloughed, and I’m expecting to take a 20% pay cut. And this is for someone just out of grad school a few years who hasn’t had a change to work and build up savings like those who have done so for 30 or 40 years….

    I’m also tired of the Federal work force being used as a scapegoat. The federal workforce is not like some of the Postal Employees, or DMV Employees that people imagine. There are hard working people in the FDA, Defense, Education, and many other federal agencies. I also wonder if people have thought about what sequestration is going to go for those federal workers who have disabilities. This could make their life more difficult for them.
    It angers me that a Marine can put his life in danger in Helmand or Kandahar Province, Afghanistan yet in this town you have politicians who don’t have any backbone to make difficult decisions. We’re all going to suffer, yes even the Tea Partiers who gloat at this. If people think we have it bad and moan about how evil our government is…my advice is to travel. Spend time living and working in a Third World country in Africa, Asia, etc… That will open your eyes. I love my government, Constitution, and way of life, but this just angers and saddens me.

  • Chip

    I’m surprised by the shrugs here. We’re talking about an estimated 750K job losses, a large percentage hitting the DC-area IT government contracting industry in which I work. (Contractors will be hit first and much harder than federal employees by the sequestration.) Layoffs already have become fairly common among IT companies here, and there won’t be enough job creation to offset the losses if the sequestration occurs as anticipated.

    I would second #15’s comments about the federal workforce, but would add that having worked on USPS contracts most of my career, I have found that Postal employees get an undue bad rap. I have found them to be as hard-working and industrious as any group of employees. Additionally, the USPS has provided a valuable pathway for people from lower-income families and African Americans to work their way into management positions. Don’t rejoice over real or potential USPS job cuts; the organization has been a real boon over the last several decades to half-century in helping people reach the middle class.

  • Jag

    I try to always complement government employees on the great job they do. The comparison in attitude and work quality between the postal service folks and the cashiers at Walmart (for example) is day and night.

    We’ve swallowed the myth that the quest for profit makes the best employees (or the best fill-in-the-blank), and our country will suffer for it. Having spent my career in corporations and consulting with a ton of different organizations on quality, I don’t believe for a minute that for-profit enterprises are any more efficient or effective than non-profit.

  • Richard

    Chip, 16

    Re: USPS, not to mention recognizing that the reason the USPS is in the red is because of the unprecedented and outlandish requirement from Congress to prefund their employee pensions. It’s an unnecessary burden that has fostered the appearance of insolvency.