Beware the ides of March, sequestration is here

After months of grandstanding and posturing, the dreaded sequestration has arrived today with all the fanfare of a Suzanne Somers book signing.

For those who may not be specifically familiar with what the sequestration is, we have to rewind the calendar back to the summer of 2011. All of the focus was on the debt ceiling and whether or not we would approve raising the debt ceiling, which essentially would allow the nation to continue to pay its bills. Tea Party Republicans had prepared for this battle after they took control of the House of Representatives in the midterm elections of 2010. The only way they would even consider allowing the debt ceiling to be raised was to have an equal amount of spending cuts.

In their primitive thinking, nothing bolsters economic growth like more people unemployed, which exactly what happens when you cut a billion dollars of government programs.

In an attempt to establish reasonable cuts, but not have them all put into place immediately, an alternative was suggested. A committee was formed to establish significant spending cuts across the board, with the exception of a handful of programs deemed too vital to cut, such as food stamps. These cuts would go into effect on January 1st, 2013 if the two sides could not come together before then with a comparable debt reduction plan.

The cuts were heavy in defense, which would theoretically prompt the war hawk GOP to want to come to the table. The cuts also impacted education, and welfare programs, which would theoretically push the Democrats to the table.

When it was clear that neither side was ready to negotiate like normal adults, the sequestration was given a two month extension, setting the new deadline at March 1st, 2013.

As with most plans with good intentions in Washington these days, sequestration fell on deaf ears in a Congress so polarized that there would be a filibuster if either party proposed a bill formally recognizing the sky is blue.

The White House proposed an alternative to the sequestration, a plan that still involved cuts, but also addressed increasing revenue through the closing of tax loopholes the allow the wealthiest Americans to avoid equitable responsibility in taxation.

Although the GOP used the closure of tax loopholes as their answer to the need for tax fairness in the last presidential campaign, they were now all too quick to indicate that any increase in revenue was simply off the table in a negotiation.

And so we get $85.4 billion in spending cuts this year. How do those cuts breakdown you ask?

• $42.7 billion in defense cuts
• $28.7 billion in domestic discretionary cuts
• $9.9 billion in Medicare cuts
• $4 billion is misc. mandatory cuts

So that is the large scale breakdown. But where do those cuts come from specifically? Here’s the breakdown provided by the White House Office of Management and Budget (OMB) via the Washington Post

• Aircraft purchases by the Air Force and Navy are cut by $3.5 billion.
• Military operations across the services are cut by about $13.5 billion.
• Military research is cut by $6.3 billion.
• The National Institutes of Health get cut by $1.6 billion.
• The Centers for Disease Control and Prevention are cut by about $323 million.
• Border security is cut by about $581 million.
• Immigration enforcement is cut by about $323 million.
• Airport security is cut by about $323 million.
• Head Start gets cut by $406 million, kicking 70,000 kids out of the program.
• FEMA’s disaster relief budget is cut by $375 million.
• Public housing support is cut by about $1.94 billion.
• The FDA is cut by $206 million.
• NASA gets cut by $970 million.
• Special education is cut by $840 million.
• The Energy Department’s program for securing our nukes is cut by $650 million.
• The National Science Foundation gets cut by about $388 million.
• The FBI gets cut by $480 million.
• The federal prison system gets cut by $355 million.
• State Department diplomatic functions are cut by $650 million.
• Global health programs are cut by $433 million; the Millenium Challenge Corp. sees a $46 million cut, and USAID a cut of about $291 million.
• The Nuclear Regulatory Commission is cut by $55 million.
• The SEC is cut by $75.6 million.
• The United States Holocaust Memorial Museum is cut by $2.6 million.
• The Library of Congress is cut by $31 million.
• The Patent and Trademark office is cut by $156 million.

These represent $35.3 billion in cuts, or 41% of the total cuts. For a total breakdown by department and by type of cut, you can read the complete report by clicking here.

You can ask Democrats or Republicans, and anyone who is paying attention will tell you there is room for cutting in most government programs. Duplication of services, redundancies in layers of management, ineffective purchasing, etc. etc.are all impacting government agencies the same way the have impacted every major corporation I have ever worked for.

The sequestration will cut over $1 trillion from the budget over the next decade if left alone. And if were as simple as saying that we found a trillion dollars that we could use to pay down the debt, that would be great, but these cuts, and the ones to follow in the next decade, will mean jobs lost, people added to the unemployment rolls, and more people dependent on government programs that are being cut.

How many jobs you ask? Another wonderful question. Estimates vary from 360,000 to over 2 million depending on which report you look at.

Lost jobs of this volume means a sharp decrease in consumer spending, which will result in economic contraction in the private sector as well, which will result in further job losses.

The good people at The Washington Post presented another great display showing specific job losses. You can sort by department, by state, or both. Just click here.

The OMB report for the 2013 sequestration indicates the United States Dept. of Agriculture (USDA) will have to trim $87 million in salaries from the Food Safety and Inspection Department. A friend of mine asked me this afternoon if I had stocked up on some meat before we reduce the number of people making sure its safe for consumption. An interesting question actually.

The argument I have made throughout this debate was that while cuts could absolutely be made in government spending, significant cuts at that, it is only intelligent to stabilize the economy first. Make cuts that impact non salary related costs, but don’t add to the unemployment at a time when we are still teetering on chaos.

You could also review every government agency and cut any spending on goods and services not made in the United States. While some would argue this would increase costs, the impact on jobs and the overall economy would offset those increases, and the message it would send would be important.

The bottom line to all of this is that sequestration is the wrong move at the wrong time. Both sides agree, but both are also willing to allow it to gain what they hope will be political capital with the people of the nation.

The GOP can boast of a trillion in cuts with no more tax increase to those unfortunate wealthy while pointing the finger at the President for drastic defense cuts that “may leave us vulnerable” to some mystery attack by the next boogeyman.

Democrats can show how they presented a method to cut more from the deficit than sequestration, and reduced the cuts dramatically by wanting to do what the GOP suggested in the campaign, close tax loopholes so that the wealthy pay an appropriate percentage of the tax burden. This idea of proportionate taxation was simply unacceptable to the GOP, so instead we will lose at least an estimated 360,000 jobs.

Each side will once again be able to “save face” with their base while doing absolutely nothing to help the American people as a whole. Sounds like business as usual.