“The Stealth Sequester”: Americans Are Starting To Feel The Pain, They Just Don’t Know It Yet
So far, the much-dreaded “sequester” – some $85 billion in federal spending cuts between March and September 30 – hasn’t been evident to most Americans.
The dire warnings that had issued from the White beforehand – threatening that Social Security checks would be delayed, airport security checks would be clogged, and other federal facilities closed – seem to have been overblown.
Sure, March’s employment report was a big disappointment. But it’s hard to see any direct connection between those poor job numbers and the sequester. The government has been shedding jobs for years. Most of the losses in March were from the Postal Service.
Take a closer look, though, and Americans are starting to feel the pain. They just don’t know it yet.
That’s because so much of what the government does affects the nation in local, decentralized ways. Federal funds find their way to community housing authorities, state unemployment offices, local school districts, private universities, and companies. So it’s hard for most Americans to know the sequester is responsible for the lost funding, lost jobs, or just plain inconvenience.
A tiny sampling: Brandeis University in Waltham, Massachusetts is bracing for a cut of about $51 million in its $685 million of annual federal research grants and contracts. The public schools of Syracuse, New York, will lose over $1 million. The housing authority of Joliet, Illinois, will take a hit of nearly $900,000. Northrop Grumman Information Systems just issued layoff notices to 26 employees at its plant in Lawton, Oklahoma. Unemployment benefits are being cut in Pennsylvania and Utah.
The cuts — and thousands like them — are so particular and localized they don’t feel as if they’re the result of a change in national policy.
It’s just like what happened with the big federal stimulus of 2009 and 2010, but in reverse. Then, money flowed out to so many different places and institutions that most Americans weren’t aware of the stimulus program as a whole.
A second reason the sequester hasn’t been visible is a large share of the cuts are in programs directed at the poor – and America’s poor are often invisible.
For example, the Salt Lake Community Action Program recently closed a food pantry in Murray, Utah, serving more than 1,000 needy people every month. The Southeast Alaska Regional Health Consortium is closing a center that gives alcohol and drug treatment to Native Alaskans.
Some 1,700 poor families in and around Sacramento, California are likely to lose housing vouchers that pay part of their rents. More than 180 students are likely to be dropped from a Head Start program run by the Cincinnati-Hamilton County (Ohio) Community Action Agency.
Most Americans don’t know about these and other cuts because the poor live in different places than the middle class and wealthy. Poverty has become ever more concentrated geographically.
A third reason the sequester is invisible is many people whose jobs are affected by it are being “furloughed” rather than fired. “Furlough” is a euphemism for working shorter workweeks and taking pay cuts.
Two thousand civilian employees at the Army Research Lab in Maryland will be subject to one-day-per-week furloughs starting on April 22, for example, resulting in a 20 percent drop in pay. The Hancock Field Air National Guard Base is furloughing 280 workers. Many federal courts are now closed on Fridays.
Furloughs spread the pain. The hardship isn’t as evident as it would be if it came in the form of mass layoffs. But don’t fool yourself: A 20 percent pay cut is a huge burden for those who have to endure it.
Bear in mind, finally, the sequester is just starting. The sheer scale of it is guaranteed to make it far more apparent in coming months.
Some 140,000 low-income families will lose their housing vouchers, for example. Entire communities that depend mainly on defense-related industries or facilities will take major hits.
If you thought March’s job numbers were disappointing, just wait.
With the sequester, America has adopted austerity economics. Yet austerity economics is the wrong medicine at exactly the wrong time. Look what it’s done to Europe.
By: Robert Reich, The Robert Reich Blog, April 8, 2013
“The Snake Is Eating Fluffy In Little Bites”: The Press Is Missing The Sequester’s Evil Genius
Love it or hate it, there’s a certain genius to the sequester. No, it’s not the notion of including cuts aimed at offending folks on both sides of the ideological spectrum. Nor is it its purported ability to force a budget deal. No, the genius is in the seven months it will take to unfold.
Why? Because $85 billion in budget cuts should cause outrage from coast to coast. But spread it out over seven months, and you might just get away with it.
Take a look at what’s happening in Indiana. The Associated Press reports that Head Start programs in Columbus and Franklin Counties have “resorted to a random drawing” to figure out which three dozen kids to drop from their early childhood education program because of sequester budget cuts. Those will be the first children to lose what is anticipated to be about 1,000 slots statewide.
It’s one of the opening skirmishes in a slow rolling war of attrition that will eventually play out across the country. The 600 families who’ve already learned they’re losing rental assistance in King County Washington. The 418 who’ve lost their jobs at an Army Depot in Pennsylvania. The Kentucky hospital that fired 28 workers.
None of these examples, on their own, are enough to garner national headlines. At least at this early stage, it can be hard to get your head around the impact of a policy that costs thirty jobs here, kicks another hundred people out of a program there, dribs and drabs of misfortune that can easily get lost in the shuffle.
Eventually, of course, the depth of the sequester cuts will add up to major setbacks for countless Americans across the country. But by then, Republicans hope the waters will be sufficiently muddied, the connection between pain and the sequester sufficiently attenuated in the public’s mind, the cuts themselves sufficiently entrenched that mounting an effort to roll them back will fall to nothing. Genius.
Now, as it happens, there’s an entity well-positioned to foil the Republican plan: It’s the media. And a media committed to methodically reporting not only the day-to-day impact of the sequester on ordinary lives, but also the big picture of what the little examples are adding up to would do us all a real service.
Instead we get this: An examination by ThinkProgress found that the suspension of White House tours “were mentioned 33 times as often (Fox News had 163 segments, CNN had 59, and MSNBC had 42)” on cable news “as mentions of other sequester impacts hitting the poor. Any discussion of sequestration’s steep cuts to housing assistance, food stamps, and Head Start early education was virtually nonexistent on all 3 networks in the same time frame.” And as you’ve no doubt seen, it’s not just cable. White House tours have been everywhere, from the Washington Post editorial pages to the nether reaches of talk radio.
So when Michigan Republican Rep. Candice Miller urges the President to “stop trying to justify the unjustifiable,” or Kansas Republican Sen. Jerry Moran says, “We can and must be smarter with our spending decisions and make cuts in ways that do not intentionally and unnecessarily inflict hardship and aggravation upon the American people,” or when South Dakota Republican Sen. John Thune asserts that White House tours are “not the kind of duplicative and wasteful spending that we should be looking to target,” the media plays right along. This despite the fact that by any rational analysis, the cut that unjustifiably inflicts hardship on the American people is the one that denies underprivileged children an entrée to critical early education services.
Seriously. What must you think of the government if, after taking a full view of the sequester, you hone in on the suspension of White House tours as the element deserving of such disproportionate attention? That the other programs really aren’t very significant at all. For Republicans, that’s really the point. We might have expected the media to take a more critical view of the matter. No such luck.
Look, I like a good White House tour as much as the next person. And if you have a child who was looking forward to one, that can be a hard thing. But I think I may have a solution: tell them why they can’t go, and be ready with an alternative thing to do. There are lots of other fun and educational activities in Washington, after all.
Here’s a harder question: what do we say to the Indiana Head Start mother who told the AP that “[my son] loves school…I don’t know how I’m going to tell him he’s not going back.”
I’ve come to think of the sequester in the following (admittedly gruesome) way: it’s something like a snake eating a hamster. If it gobbles up fluffy all in one bite, you can see that hump moving all the way down the line as the snake digests his delectable treat. Hard to miss. But if snake eats fluffy one little bite at a time, the hamster’s still dead, and nobody notices. Unless someone calls the snake out.
Hey media: your move.
By: Anson Kaye, U. S. News and World Report, March 21, 2013
“Darrell Issa’s Misguided Priorities”: Desperate Even By GOP Standards
The Beltway’s interest in the role of sequestration cuts leading to canceled White House tours reached farcical heights last week, in large part because congressional Republicans are afraid the scrapped tourist opportunities will make them look bad.
But leave it to House Oversight Committee Chairman Darrell Issa (R-Calif.) to go completely over the top.
For those who can’t watch clips online, Issa released an attack video this morning, presumably paid for with our tax dollars, whining once more about the White House tours. The message of the attack itself is rather odd — Issa apparently believes the cancelation of tours will give the president more leisure time, though that really doesn’t make any sense — and comes across as rather desperate, even by House GOP standards.
But what’s especially amazing about this case is Issa’s bizarre priorities. For reasons I can’t understand, the far-right Republican is fascinated by White House tours, but seems entirely indifferent to the meaningful effects of sequestration in his own congressional district.
A Democratic source this morning alerted me to several recent headlines from the area Issa ostensibly represents:
* A rally was held in San Diego last week to “demonstrate the impact of sequestration on low income seniors.” An administrator at a local facility said, “[B]ack in D.C. what they’re talking about are cuts from White House tours and the president’s golf game but in the meantime real seniors who are hungry are not going to have food.”
* A major employer in San Diego announced a series of layoffs, effecting 185 workers, which became necessary “as a result of the cuts being brought about in the federal budget because of sequestration.”
* The sequester is set to shutter an air-control traffic tower in San Diego, which local officials believe will “jeopardize aerial firefighting in a region prone to wildfire.”
The list goes on. Sequestration is causing serious problems at San Diego’s ports, ship yards, and the local economy in general.
All of this is happening in Darrell Issa’s own hometown, and he’s focusing his attention on White House tours? I can’t remember the last time I saw a congressman so indifferent to the effects of a policy on his own community.
By: Steve Benen, The Maddow Blog, March 20, 2013
“Fool Me Once”: The Sequester Is Proof That Washington Thinks We Are All Idiots
The tales of sequester woe are starting to mount. Congressmen are complaining about cancelled White House tours, freaking out over potential furloughs of meat inspectors, and fretting over budget cuts in Yellowstone National Park. Republican officeholders are starting to realize that the parochial government services that businesses and consumers in their districts need and care about are getting hit.
And for what? We’ve argued that the primary deficit—the mismatch between the amount of money the government collects each year and the amount of money it spends each year—is melting away. We received further confirmation of this melting trend Wednesday, with the release of the latest Treasury Monthly Statement. It was overlooked, as it dropped just a couple hours before the new pope was announced. But it’s worth examining.
The headline was that February wasn’t a great month for the profit-and-loss sheet of the federal government. It took in $122.8 billion and spent $326 billion, notching a $203.5 billion deficit. That’s pretty grim. But February is always a bad month for receipts. And when you dig into the number, it is possible to see significant improvement.
Compared with February 2012, revenues in February 2013 were up an impressive 18.8 percent. Meanwhile, spending was actually down 2.6 percent from February 2012. So the February 2013 monthly deficit was 12 percent smaller than the February 2012 monthly deficit. This is not an anomaly. For the first five months of fiscal 2013, which started in October, revenues were $1.01 trillion, up 13 percent from the first five months of fiscal 2012, while spending was up just 2.1 percent. The deficit in the first five months of fiscal 2013 is $494 billion, down nearly 15 percent from the first five months of fiscal 2012.
To what do we owe this? Revenue is tied to growth. When the economy grows consistently, more people go to work, more people earn higher wages, and they pay more income and payroll taxes. Companies tend to make more profits, and even though they spend lots of time and effort dodging taxes, they still wind up paying more corporate income taxes. Meanwhile, as we’ve pointed out before, when jobs increase and the economy grows, spending on programs like unemployment benefits fall. That helps narrow the deficit, too. In February, spending on unemployment benefits was off 25 percent from the year before.
There’s another factor at play. And Republicans might want to avert their eyes for this next paragraph. On January 1, the government raised taxes. The payroll tax, which had been cut temporarily to 4.2 percent from 6.2 percent, went back up—a 48 percent increase. And so the 130 million or so Americans with payroll jobs have been paying higher federal taxes for the past two months. Meanwhile, as part of the fiscal cliff deal, higher income taxes were also put in place for high earners. They’re now paying more, too.
A funny thing happens when you raise taxes—you get more tax revenue.
Since the higher tax rates kicked in on January 1, Americans haven’t Gone Galt. They haven’t stopped working in protest of higher taxes and companies haven’t stopped hiring. In fact, they’ve been working more. As a result, revenue has been flooding into Washington. In the two months of the new tax regimen (January and February 2013), receipts are up 17 percent from the comparable period in 2012. Meanwhile, for all the charges of socialism, spending remains muted. A look at the daily Treasury statement suggests the higher revenue trend has continued through the first half of March.
The sequester, universally derided as a stupid way to get deficit reduction, is designed to bring $84 billion in deficit reduction in this fiscal year. Well, in the first five months of fiscal 2013, the deficit is already, wait for it, $85.8 billion smaller than it was in the first five months of fiscal 2012. And that’s all before the sequester takes full effect.
Quiet as it is kept, we are living in a great age of deficit reduction. If we project the numbers from the first five months of this fiscal year into the rest of it, it’s quite likely that the deficit will come in under $900 billion—even without the sequester. That’s high, and it is still a lot of money. But it would represent a deduction of nearly 20 percent from fiscal 2012. And with the economy continuing to grow steadily, the deficit as a percentage of GDP would shrink by an even larger margin.
Washington told itself it needed the sequester in order to make a significant dent in the annual deficit. With each passing month, and with each passing Treasury Monthly Statement, we’re learning that’s not true.
By: Daniel Gross, The Daily Beast, March 14, 2013
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