Tracking the Sequester’s Cuts

By Wayne Winegarden and Donald Rieck, April 22, 2013

The vast list of each budget item cut in FY2013 due to the sequester can be found here: www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/stareport.pdf.  And, the views of its impacts are as varied as the programs being cut.

Showcasing two voices from both sides of the issue, Larry Kudlow has argued that while:

President Barack Obama may be backing away from his doomsday spending-cut predictions as the sequester goes into place…the new party line is that while there will be no impact in the first few days, there’ll be a slow, downward slump after that.

What, are we to believe that lower spending and smaller government damage the economy? Doesn’t that run counter to virtually every reasonably objective study in recent years—including ones from a number of U.S. academics and the OECD in Europe—that describe how countries with lower government spending grow more, and how countries with higher government spending grow less?

However you calculate the sequester spending cuts, and however uneven they may be, the reality is that the sequester at least moves the ball in the right direction. I maintain that by reducing the government spending share of gross domestic product, the sequester is pro-growth.[1]

On the other side of the debate, Jon Favreau on The Daily Beast details a parade of horrific outcomes wrought by the sequestration:

One month and 5 billion cable hits on White House tours later, a flurry of great reporting is allowing us to answer for ourselves the question of whether President Obama has “cried wolf.” If we want, we can ask the Americans who are losing their jobs at military bases in Tennessee, Illinois, and Virginia. We can ask the health-care employees facing layoffs in New York, or the contractors in Oklahoma, or the teachers in Iowa, or the workers cleaning up nuclear waste in Washington. We can ask the children in Ohio and Pennsylvania who will no longer receive the early education that Head Start provides. We can ask the scientists and researchers at Duke and the University of Florida who must end their pursuit of discoveries that could change or save lives. We can ask the hungry families in Utah who can no longer rely on the local food pantry, the disabled tenants in California who will lose their housing vouchers, the elderly cancer patients in South Carolina who are being denied their chemotherapy treatment, or the 39-year-old Army veteran in Maryland who believes the only way to survive his pay cut is with another combat deployment.

The “flurry of great reporting” references a Huffington Post piece which lists out 99 specific instances where communities have been effected by the sequester (www.huffingtonpost.com/2013/04/02/sequestration-effects_n_2996101.html).  A sampling of the cuts includes:

  1. 1.      Air Force base jobs lost in Tullahoma, Tenn. — The Aerospace Testing Alliance announced it is cutting 128 of 1,809 civilian jobs at Arnold Air Force Base in Tullahoma starting April 19. It has also put in place a 20 percent pay cut and weekly furloughs for workers at a research facility.

4. Food pantry closed in Murray, Utah. — The Salt Lake Community Action Program closed its food pantry, one of five locations that serve more than 1,000 people every month. Executive Director Cathy Hoskins told The Huffington Post that in addition to the closure, the organization has stopped paying into employees’ retirement plans, won’t fill an open job and told some staffers to take a week’s unpaid leave. “I’ve had one person retire, we’re not replacing them. We’re not doing any hiring at all,” Hoskins said. “We’re trying very hard to boost our volunteers, but this is hard work working in a pantry. And if you get a volunteer, usually it’s a short-term volunteer because it’s just very very difficult work. … No raises, no increases, none of that stuff. We’re cutting everything we possibly can.” [Link]

27. Less camping in Connell, Wash. — Scooteney Park has remained closed to campers because of sequestration. Day use remains intact.

29. Air show cancelled in Rapid City, S.D. — Officials at Ellsworth Air Force Base have cancelled the Dakota Thunder air show this year. It has been held every few years for decades at the base.

However, assessing the value of the closed programs – and perhaps many people would value a food pantry above air shows or campground availability – requires an understanding of what else is foregone.  The debate over the sequester cannot be adequately settled without an understanding of the private resources foregone in order to maintain the public expenditures that have been reduced.  Going forward, such a trade-off is the key to understanding the actual net economic impact from the sequester.

Regardless of one’s position, unless the current policy course is changed, the effects of the sequestration will continue to shake out over the next couple of weeks and months.  And, it may be a little premature to, pace Mark Twain, proclaim that the rumors of the “sequestration apocalypse” have been greatly exaggerated.

However, if squeezing $88 billion, or 2.4%, out of a $3.7 trillion budget is this difficult, even with the motivation of a $16.8 trillion dollar national debt hanging over our heads, then the future $123 trillion unfunded liabilities and debt will be even more problematic. 



[1] Kudlow, Larry (2013) “No Sequester Catastrophe” cnbc.com, March 4;www.cnbc.com/id/100520098.

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One Response to Tracking the Sequester’s Cuts: Part 1

  1. […] However you calculate the sequester spending cuts, and however uneven they may be, the reality is that the sequester at least moves the ball in the right direction. I maintain that by reducing the government spending share of gross domestic product, the sequester is pro-growth.[1] […]