In my article last week I tried to place the "sequestration issue" in real numbers we all could understand. All the politicians in their usual "concern for we the citizens" (LOL); the Democrats suggested the world would all but end, that vital services would cease to exist, and according to Rep Maxine Water (D-CA), 170 million jobs would be lost. For the Republicans, the matter was far less catastrophic, but would stick to their guns that the country had to get off the spending binge and that sequestration was about the only option left to the run-a-way money presses of Ben Bernanke, saying we are mortgaging our children and grand children's future with trillion dollar annual deficits.
In the first place "sequestration", in all its glory of "cutting" the federal budget is not a "cut" in real terms. Once you understand baseline budgeting under which the federal government has grown to such a behemoth size (we have to borrow about 46 cents for every dollar we spend) budget cuts take on a whole new meaning.
So…once again, what is baseline budgeting?
Baseline budgeting is based on the presumption that every item in the budget will automatically increasebetween 3% and 10% depending on what the item is every year, regardless what happened in the previous year. If an agency doesn't spend its entire budget for the year…their "starting point for more money" is the budget they spent for that year. This is why, the agriculture department starts advertising for food stamp applicants because they want their budget to increase. In Washington, the bigger the budget-the more power that agency develops. They will even go to such an extent as to give-away food stamps in order to make sure they get that three to 10% increase.
So…when Washington talks about "BUDGET CUTS", they don't speak the same language as we the people who, over the last two administrations have had to make real budget cuts in order to survive. Maybe we lost our job; maybe we took a pay cut to help our company survive; maybe our wife lost her job or saw her hours cut (now being termed as "part-time employee) to dodge the forthcoming Obamacare plague on all employers…to us, a budget cut means we have to survive on less income.
When Uncle Sam talks of budget cuts with their baseline budgeting, all they do is cut the amount of the anticipated increase from the previous year's budget…and guess what…we the people get the blame when we stand up an object because the government pig just keeps growing and to object means we just don't have a heart! With these automatic increases every year we see how the government has been able to cause the federal debt limit to rise from $8.2 trillion in 2006 to what will be well over $17 trillion by the end on 2013.
The government turns the situation around and gets the non-thinkers to believe those who invested and risked their money (in many cases, their life savings) to create a business and that they couldn't have become successful without the help of government, when in fact, if government got the hell out of the way, most would probably be a lot more successful. Small businesses would begin to grow once again and we'd be able to get those 20 million unemployed and under-employed back to being productive Americans!
With all the divisiveness and polarization we see in today's politicians reinforced by a media that is more intent on currying favor with the administration than doing any real investigative journalism, occasionally I run across an article or two that does get close to the real issues at hand. I'll give you an example in a second.
As I wrote several months ago, real investigative journalism is dead. Of the hundreds upon hundreds of so-called journalists (or reporters as they were called in years gone by), there are only a very small handful (and I named about ten who came to mind) that still fall into the "real journalist" category…one was Bob Woodward who broke the Watergate scandal wide open back in Nixon's days. He is revered in the journalism hall-of-fame, but when he stepped to the plate to tell the real story that the sequestration idea was the idea of President Obama (from interviews he had during those early-on discussions regard the seemingly endless budget debacles we've had over the years), the mainstream media turned on him like a bunch of vipers, because he wasn't buying the President's contention that the Republicans were responsible for the whole idea of sequestration.
Back to my original thought about the details of sequestration…
From Factcheck.org: An ad from a fiscally conservative group makes a true but misleading claim that the sequester only amounts to “a 3 percent cut in federal spending.” A majority of federal spending is exempt from the sequester cuts, so the parts that are not will be cut much more deeply than that. For example, defense spending (other than for military personnel) will be cut by 8 percent across the board, and nondefense discretionary spending will be cut by between 5 percent and 6 percent. Both Congress and the White House have reassured the VA that its budget is safe. However, non-VA programs that benefit veterans may still see reductions in the name of “balancing our nation’s budget.” (According to an IAVA report)
The sequester would reduce federal spending in the 2013 fiscal year by $85 billion (and by a total of $1.2 trillion over 10 years). The federal government will spend about $3.55 trillion this year, so $85 billion amounts to about 2.4 percent of all federal spending.
But that’s misleading, because large parts of the federal budget are exempt from the sequester cuts — including such “mandatory” programs as Medicaid, Social Security, welfare and food stamps. The sequester cuts are split between defense and nondefense spending. They include cuts to discretionary defense spending (such as weapons purchases and base operations, but not military personnel) and to both discretionary and nondiscretionary domestic programs (everything from airport security to education aid to research grants). Cuts to those programs will be much deeper than 2.3 percent. REMEMBER…THESE ARE CUTS TO ANTICIPATED INCREASES).
Here's a quote I found from a Certified Public Accountant regarding sequestration which every American needs to read so we are hoodwinked by the Beltway Gang of Thugs:
DMMSC wrote:
”You need to study up on how government budgeting works. The government operates under an accounting principle called baseline budgeting. This means that every year the budget automatically increases for various factors such as inflation and populations increases. So, in other words, any budgetary cuts are essentially cuts in the increasing budget from year to year. In other words the budget will increase next year but not by as much as was originally intended. This is akin to saying my budget this year is $1 billion and next year it will be $1.1 billion but with these cuts my budget will only be $1.05 billion. The budget will be bigger than the current year's budget but just won't increase as much as originally planned. I'm a CPA but I have to admit that I'm a little puzzled how this impacts things such as current personnel and maintenance levels. Are you saying that the National Parks won't be able to hire the new personnel it projects in its new budget? Or please explain why they would have to cut staff and services even though their budget increases from year to year?"
According to a February report from the nonpartisan Congressional Budget Office, the sequester includes $42.7 billion in cuts to discretionary defense spending, a 7.9 percent reduction; $28.7 billion in nondefense discretionary cuts, a 5.3 percent reduction; $9.9 billion in Medicare cuts, a 2 percent reduction; and $4 billion in other mandatory cuts, a 5.8 percent reduction. (See Table 1-2 on page 14.)
REMEMBER: The resultant total budget cuts we are talking about are 7.9% OF THE ANTICIPATED INCREASE OVER THE PREVIOUS YEAR'S BUDGET. I reiterate…these are cuts to anticipated increases.
Think just how fast our country could recover from this economic malaise we are in if the federal government would just do three simple things:
- Freeze the federal budget to what we spent in 2011 (remember 2011? We were funding two wars and throwing billions out the window on pipe-dream green energy projects which have resulted in over 30 bankrupt companies-meaning more unemployment).
- Reduce federal employment by ATTRITION, until we reach federal employment levels we had back in 2009. What that means is that when someone retires, quits, or dies, the government moves their staffs around to fill the void left by the dearly departed. Think that is impossible as all those bureaucrats claim? Remember when we had the last major "weather emergency" that hit the East Coast? Federal employees were told to stay home and that ONLY ESSENTIAL EMPLOYEES SHOULD REPORT TO WORK. Folks, 80% of those federal employees didn't have to report for work! Why are we the taxpayers paying for any employees that are not deemed ESSENTIAL!
- And last but certainly not least. Follow the GAO (Government Accounting Office) March 2011 Report which hit the ball out of the park in its second annual report to Congress in response to the statutory requirement that GAO identify federal programs, agencies, offices, and initiatives, either within departments or governmentwide, which have duplicative goals or activities. For 81 additional opportunities to reduce potential duplication, save tax dollars, and enhance revenue, and have yet to be acted upon.
GAO has reported 51 areas where programs may be able to achieve greater efficiencies or become more effective in providing government services if we got rid of duplication, overlap, or fragmentation among federal government programs. They found that agencies can often realize a range of benefits, such as improved customer service, decreased administrative burdens, and cost savings from addressing the issues raised in their report. Cost savings related can be difficult to estimate because the portion of agency budgets devoted to certain programs or activities is often not clear, which in itself exemplifies waste. Don't you and your wife have to know where every dime is spent these days? And if you are a business owner, you'd better have a handle on every dime spent or you won't be staying in business.
I am sure the actions that need to be taken in the GAO report will require careful deliberation and tailored, well-crafted solutions, but please let's let real business people play a major role in making those decisions, and NOT leave it up to a group of bureaucrats more interested in protecting their own fiefdom than cleaning up the mess.
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