Another manufactured budget crisis is facing Washington, but this time around it looks as if there will be no last-minute showdown.
A sequester that will result in an across-the-board spending cut of $85 billion from defense and non-defense programs for the remainder of the 2013 fiscal year will take effect next Friday.
It was never the intention of lawmakers for the sequester to actually happen. During deficit reduction talks in 2011, the threat of sequestration was intended to be a forcing mechanism for Republicans and Democrats to find a smarter solution to the upcoming indiscriminate cuts. However, lawmakers are still facing a gridlock with no alternative compromise in sight.
Democrats have proposed a temporary plan to offset sequestration with cuts to agricultural subsidies and new tax revenue. President Barack Obama has also pressed Congress to find a short-term fix by passing a smaller package of spending cuts and tax reforms. But Republicans, who haven’t yet decided on a plan of action, are refusing any new taxes. They say spending cuts are the way to go and that the sequester will happen come March 1.
Several military officials and senators have repeatedly warned of the dangers of the spending cuts on the nation. And experts say when the sequester is in place the impact on government services will be felt by everyone in each state, but some won’t recognize the setbacks are connected to the goings on in Washington.
How Will Sequestration Affect You?
The effect on individual Americans won’t be immediately felt the day of the sequester. Instead, if the problem lingers, the effects of the gradual reduction will grow.
Longer lines at the airport could be a result of the cuts in the number of federal employees. Additionally, flying could be more dangerous, if cuts result in fewer air traffic controllers and aircraft safety inspectors or TSA agents working.
Government agencies may have to consider furloughs for hundreds of thousands of federal employees. A conservative estimate is that approximately 700,000 jobs could be affected. Another study has stated that number could be more than 2 million.
There could be less manpower at the Justice Department investigating and prosecuting federal crimes. The home may not be such a safe haven either, when there are fewer food-safety and product inspections taking place. The CDC will have less funds for researching life-threatening diseases.
“That could create public health problems and supply problems,” said Mattea Kramer, research director at National Priorities Project. “Federal workers will see furloughs. Take-home pay will be reduced. Money is sucked out of the economy because people won’t spend. … We won’t necessarily recognize that this is the effect of sequestration.”
And those effects may reach even further if there is inaction.
Education could take a hit because there will be fewer teachers, and there will be cuts in funding for grants and training programs. Over time, cuts to college financial aid would result in fewer enrollments.
In a testimony before the Senate Appropriations Committee last week, Daniel I. Werfel, controller at the Office of Management and Budget, said that agency is yet to finalize the percentage of reductions that would apply to all non-exempt accounts.
Preliminary estimates are that the automatic spending cuts would reduce non-defense programs by 5 percent and defense programs by about 8 percent. However, when agencies are required to implement the cuts over the remaining seven months of the fiscal year, Werfel said the cuts would be closer to 9 percent for non-defense programs and 13 percent for defense programs in comparison to the spending that would have occurred under normal circumstances.
“Any budgetary cuts of this magnitude would have significant repercussions, regardless of how they are applied,” he said. “The sequestration would lead to a number of deeply troubling consequences in critical government programs that we all depend on.”
Questions have also been raised about America’s military readiness.
The Budget Control Act in 2011 requires $487 billion in cuts in defense spending over the next decade. Sequestration will cause an additional $500 billion in mandatory, across-the-board cuts at the Pentagon in the same period. And Congress’ failure to appropriate defense funding for the 2013 fiscal year that started in October is added fuel to the fire.
Defense Secretary Leon Panetta has called the issue a “perfect storm of budget uncertainty.”
Stars and Stripes reported that Panetta notified Congress Wednesday of plans to furlough nearly 800,000 civilian employees one day each week beginning in April. The Pentagon is required by law to warn Congress of furloughs at least 45 days in advance.
“We are doing everything possible to limit the worst effects on DOD personnel – but I regret that our flexibility within the law is extremely limited,” Panetta said. “As a result, should sequestration occur and continue for a substantial period, DOD will be forced to place the vast majority of its civilian workforce on administrative furlough.”
Werfel has said the sequester would make America “less secure at home, reducing our ability to protect our borders, stay ahead of emerging cybersecurity threats, and keep crime off our streets and out of our neighborhoods. And it would make us less safe abroad by causing critical degradations in the support for and readiness of our Armed Forces.”
He told lawmakers that the Department of Defense would likely have to reduce training and equipment maintenance for later deploying units, delay facilities maintenance and significantly reduce investments in weapons programs. Contracts could be terminated for businesses that work with the federal government.
“There is no amount of planning or preparation that can avoid these damaging impacts,” Werfel said. “Prudence dictates, however, that the federal government take all reasonable steps to be ready to implement sequestration in the most responsible way possible.”
Barry Bosworth, a former presidential adviser who is now a senior fellow at Brookings, said bigger agencies will have more flexibility to shift around funds to meet their most critical needs.
“So it tends to hit some of the smaller agencies harder,” he said.
National Priorities Project Kramer said should the sequester take place, lawmakers still have an opportunity to come together to pass a spending bill of sorts or a budget. Government agencies are running because of a continuing resolution that provides funding through March 27.
“They can retroactively cancel sequestration and put together a deficit package,” Kramer said. “That will give them the opportunity to conduct deficit reduction with smarter cuts.”
And Bosworth said if lawmakers miss both deadlines there could be “severe economic disruption and recession.”
“But in the past they always backed down, and I predict they will do the same,” he said. “Also it is not that hard for the Senate to at least propose and pass a budget. It is a bit stupid, but in many respects it reflects the stalemate among the public who also oppose tax increase and cuts in their favorite programs; cut other peoples’ programs. I think that the truth is that there is waste in government, but it is not that big. If they are going to reduce expenditures, it will hurt. The notion of a painless means to balance the budget is a myth.”
Read the White House's sequestration report.