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The Big Gamble - How Much Will the Cuts Hurt?
With the ax set to fall on federal spending in five days, the question in Washington is not whether the sequester will hit, but how much it will hurt. Over the past week, President Obama has painted a picture of impending disaster, warning of travel delays, laid-off firefighters and pre-schoolers tossed out of Head Start. Conservatives accuse Obama of exaggerating the impact, and some White House allies worry the slow-moving sequester may fail to live up to the hype.Oh, dear! And whose hype is that? In the long partisan conflict over government spending, the sequester is where the rubber meets the road. Obama is betting Americans will be outraged by the abrupt and substantial cuts to a wide range of government services, from law enforcement to food safety to public schools. And he is hoping they will rise up to demand what he calls a "balanced approach" to deficit reduction that replaces some cuts with higher taxes. "The good news is, the world doesn't end March 2. The bad news is, the world doesn't end March 2," said Emily Holubowich, a Washington health-care lobbyist who leads a coalition of 3,000 nonprofit groups fighting the cuts. "The worst-case scenario for us is the sequester hits and nothing bad really happens. And Republicans say: See, that wasn't so bad." As long as the Trunks don't cave in. Adding to the liberal angst is concern that the scale of the cuts may be overstated, at least in the short term. While the sequester orders the White House to withdraw $85 billion in spending authority from affected agencies in the fiscal year that ends in September, the nonpartisan Congressional Budget Office predicts that agencies will reduce actual spending by only about $44 billion, with the remaining cuts carried over into future years. The White House has to withdraw the money? What if The One doesn't want to? Can't he just issue another Executive Command? Compared with total 2013 discretionary spending, that's a cut of less than 4 percent. I wish I could lose 4% of my body fat. The impact will be magnified, however, because of certain exemptions -- military payrolls, for example -- and because it must be compressed into seven months rather than being spread out over 12. As a result, some agencies, notably the Pentagon, are contemplating cuts to nonexempt accounts of as much as 17.5 percent. Still, managers at many agencies have been bracing for the cuts, postponing purchases and new hires so they can protect employees and the public from the very disruptions to core services that would draw headlines. My wife lost a real estate sale this week when the buyer got a furlough notice. "This is the Catch-22," said Richard Kogan, a former Obama budget official now at the left-leaning Center on Budget and Policy Priorities. "The problem would be solved faster if it was literally a disaster. But making it a disaster is not what agency managers really want to do." Really? We'll see about that. I bet the White House gives bonus points for the biggest disaster.  Liberals complain that the White House has been slow to raise the alarm. Four months ago, Obama said during the final presidential debate that the sequester "will not happen." Throughout his reelection campaign, the White House refused to discuss the cuts or plan for their implementation.More like slow to solve the problem; slow to lead. The WaPo goes on at some length to describe the coming pain. On Thursday, the National Parks Service announced that furloughs would curtail services at such popular destinations as Yellowstone, Yosemite and the Grand Canyon. And on Friday, Transportation Secretary Ray LaHood released a list of airfields that could close due to Federal Aviation Administration furloughs. Conservatives were unimpressed. In 1981, President Ronald Reagan "fired more than 10,000 air traffic controllers. There could have been massive disruption. But there wasn't," said Chris Edwards, a budget expert at the libertarian Cato Institute. Meanwhile, the screaming from state officials and private industry has also been muted. Governors in Washington for their annual winter meeting bemoaned the cuts, but while Democrats demanded an end to them, Republicans merely asked for more flexibility. Chicken farmers in Delaware and Maryland are lobbying against cuts to food safety inspectors; the American Hospital Association is pushing to ease cuts to medical research; and defense industry executives have been prowling the halls of the Capitol for months. Everybody is too important to have their trough reduced. But there's no grand stop-the-sequester movement. And unless the public starts complaining, the AEI's Makin said Democrats' best hope for persuading Republicans to reconsider the sequester may be a new recession. What's the Pubs best hope for convincing the Dims? The sequester is forecast to slice 0.6 percentage points from economic growth this year, and destroy 750,000 jobs. But just think how many would have been destroyed without the sequester! It doesn't work that way? "By summertime, if the economy gets much weaker, then the pressure to do something starts to grow," Makin said. "Then the blame game will really get exciting, because Democrats will say if Republicans hadn't been so awful and mean, we wouldn't be having a recession now. And the Republicans will all panic." Panic, unless they have a plan and a mouthpiece. And a platform to speak from. With Congress headed back to Washington Monday, Republicans so far seem to be having no second thoughts. The Senate plans to vote this week on its proposal to replace the sequester through January in part with higher taxes on millionaires, but Democrats acknowledge the measure has no chance of passing. Grandstanding, if the Pubs were doing it. "Having no cuts at all is far, far, far worse," said Sen. Jeff Flake (R-Ariz.). "So I see no alternative right now." The Sequester - Halfway There. Posted by: Bobby 2013-02-24 |
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