“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
“Outraged”: Republicans Overcome With “Sequestration NIMBYism”
It’s been about two weeks since Brian Beutler coined a helpful phrase: “sequestration NIMBYism.” Republicans love the sequester policy they hated as recently as last month, and think it’s terrific that these deep, mindless spending cuts have taken effect.
But they’re not at all pleased about sequestration cuts that hurt their own constituents. As Brian explained two weeks ago, the across-the-board nature of the policy makes it nearly inevitable that lawmakers will see some consequences in their districts and states, “but when those consequences materialize, Republicans either blame the administration or plead for special treatment.”
Jed Lewison explained this morning:
After years of doing nothing but talk about the need to cut spending, Republicans have finally started to get what they want — and it turns out they don’t like it. But instead of doing the obvious thing, which would be to change their position on austerity, they’re simply issuing press releases and statements about how they don’t like the cuts that are taking place in their own back yard.
The problem is that their solution — to make the cuts in somebody else’s back yard — isn’t really a solution. It’s just political spin. There is no magic wand to make spending cuts be painless and for Republicans to pretend otherwise is transparently dishonest and defies common sense.
We’ve covered this a bit in recent weeks, but Republican criticism of sequestration cuts appears to be intensifying. Of particular interest at this point is which cuts, in particular, have become cause for alarm.
Is it concern over Head Start closings? Food-safety furloughs? Struggling Americans going without housing assistance? Setbacks for medical research into Alzheimer’s disease and influenza? Layoffs at nuclear containment sites? Disruptions in the courts?
No, as is it turns out, the one issue that finally managed to capture Republicans’ attention is … airports.
We learned last week that the FAA, left with no choice thanks to the sequester Republicans are so fond of, is closing many air traffic control facilities in April. GOP members of Congress are outraged.
Sequestration generally provides agencies little flexibility to determine what parts of their budgets to cut — agencies with broad missions have to cut every program by the same percentage. But the majority of FAA’s employees are air traffic controllers, and as a result, FAA has identified and announced its intent to close nearly 150 relatively low-volume towers to help meet its $600 million sequestration this fiscal year.
A group of Senate Democrats and Republicans led by Jerry Moran (R-KS) attempted to reverse the scheduled closures during the debate over funding the government, and make up the spending cuts with unobligated FAA capital funds, but their amendment did not receive a vote.
The effort reflects a pattern among lawmakers — particularly GOP lawmakers — to decry sequestration cuts in their own states and districts, but decline to support a sequestration replacement plan that includes higher revenue. Instead, they support keeping small airports in their jurisdictions open at the expense of financing improvements at higher-traffic airports.
A variety of far-right Republicans, many of whom demand deep and lasting spending cuts, are now demanding that sequestration cuts bypass their constituents.
In one especially amusing story, a Texas Republican whined that spending cuts under the sequester may — wait for it — hurt the economy.
As Greg Sargent recently put it, “Welcome to Sequestration Nation.”
Note to Congress: it’s a stupid policy doing real harm to real people. Just turn the darn thing off.
By: Steve Benen, The Maddow Blog, March 27, 2013
“After The Flimflam”: Little By little, Washington’s Fog Of Fiscal Austerity Seems To Be Lifting
It has been a big week for budget documents. In fact, members of Congress have presented not one but two full-fledged, serious proposals for spending and taxes over the next decade.
Before I get to that, however, let me talk briefly about the third proposal presented this week — the one that isn’t serious, that’s essentially a cruel joke.
Way back in 2010, when everybody in Washington seemed determined to anoint Representative Paul Ryan as the ultimate Serious, Honest Conservative, I pronounced him a flimflam man. Even then, his proposals were obviously fraudulent: huge cuts in aid to the poor, but even bigger tax cuts for the rich, with all the assertions of fiscal responsibility resting on claims that he would raise trillions of dollars by closing tax loopholes (which he refused to specify) and cutting discretionary spending (in ways he refused to specify).
Since then, his budgets have gotten even flimflammier. For example, at this point, Mr. Ryan is claiming that he can slash the top tax rate from 39.6 percent to 25 percent, yet somehow raise 19.1 percent of G.D.P. in revenues — a number we haven’t come close to seeing since the dot-com bubble burst a dozen years ago.
The good news is that Mr. Ryan’s thoroughly unconvincing policy-wonk act seems, finally, to have worn out its welcome. In 2011, his budget was initially treated with worshipful respect, which faded only slightly as critics pointed out the document’s many absurdities. This time around, quite a few pundits and reporters have greeted his release with the derision it deserves.
And, with that, let’s turn to the serious proposals.
Unless you’re a very careful news reader, you’ve probably heard about only one of these proposals, the one released by Senate Democrats. And let’s be clear: By comparison with the Ryan plan, and for that matter with a lot of what passes for wisdom in our nation’s capital, this is a very reasonable plan indeed.
As many observers have pointed out, the Senate Democratic plan is conservative with a small “c”: It avoids any drastic policy changes. In particular, it steers away from draconian austerity, which is simply not needed given ultralow U.S. borrowing costs and relatively benign medium-term fiscal projections.
True, the Senate plan calls for further deficit reduction, through a mix of modest tax increases and spending cuts. (Incidentally, the tax increases still fall well short of those called for in the Bowles-Simpson plan, which Washington, for some reason, treats as something close to holy scripture.) But it avoids large short-run spending cuts, which would hobble our recovery at a time when unemployment is still disastrously high, and it even includes a modest amount of stimulus spending.
So we could definitely do worse than the Senate Democratic plan, and we probably will. It is, however, an extremely cautious proposal, one that doesn’t follow through on its own analysis. After all, if sharp spending cuts are a bad thing in a depressed economy — which they are — then the plan really should be calling for substantial though temporary spending increases. It doesn’t.
But there’s a plan that does: the proposal from the Congressional Progressive Caucus, titled “Back to Work,” which calls for substantial new spending now, temporarily widening the deficit, offset by major deficit reduction later in the next decade, largely though not entirely through higher taxes on the wealthy, corporations and pollution.
I’ve seen some people describe the caucus proposal as a “Ryan plan of the left,” but that’s unfair. There are no Ryan-style magic asterisks, trillion-dollar savings that are assumed to come from unspecified sources; this is an honest proposal. And “Back to Work” rests on solid macroeconomic analysis, not the fantasy “expansionary austerity” economics — the claim that slashing spending in a depressed economy somehow promotes job growth rather than deepening the depression — that Mr. Ryan continues to espouse despite the doctrine’s total failure in Europe.
No, the only thing the progressive caucus and Mr. Ryan share is audacity. And it’s refreshing to see someone break with the usual Washington notion that political “courage” means proposing that we hurt the poor while sparing the rich. No doubt the caucus plan is too audacious to have any chance of becoming law; but the same can be said of the Ryan plan.
So where is this all going? Realistically, we aren’t likely to get a Grand Bargain any time soon. Nonetheless, my sense is that there is some real movement here, and it’s in a direction conservatives won’t like.
As I said, Mr. Ryan’s efforts are finally starting to get the derision they deserve, while progressives seem, at long last, to be finding their voice. Little by little, Washington’s fog of fiscal flimflam seems to be lifting.
By: Paul Krugman, Op-Ed Columnist, The New York Times, March 14, 2013
“Pernicious GOP Nonsense”: Spending Isn’t The Problem, Austerity Is
Don’t buy the budget hype. Sure it’s fun to ding Paul Ryan for his unrepentant (Election? What election?) budget plan and his Obamacare contortions. (He wants to repeal it, except for its Medicare savings and tax increases, which he was against, then for, then against, and now for again). But here’s the thing about budget resolutions: They’re not laws. They’re not binding. They are, for all intents and purposes glorified, congressionally sanctioned, party platforms.
The great budget debate, in other words, is a philosophical one. And while such arguments are important we shouldn’t let them distract from the real-world policy fights ongoing about how money is actually spent or not spent.
If you’ve paid any attention, for example, you know the GOP’s mantra, that the nation’s problem is spending, which is “out of control.” This is the basis for their entire policy agenda. It’s also pernicious, economically destructive nonsense.
Consider some data points:
Federal spending grew by 0.6 percent from 2009 to 2012, according to Bloomberg. That’s the slowest rate since the Eisenhower years. That’s a novel definition of “out of control.”
Austerity has been the single biggest drag on job growth, according to the Wall Street Journal. The paper notes that federal, state, and local governments have cut nearly 750,000 jobs since June 2009. “No other sector comes close to those job losses over the same period,” the Journal reported last week. “Construction is in second worst place, but its 225,000 cuts are less than a third of the government reductions.” The same article figured that without the public-sector job losses, the unemployment rate would be 7.1 percent instead of 7.7 percent. Remember that the next time Republicans react to improving job numbers with statements of yes, but it should be better.
And what good is all this austerity? “Here’s a pretty important fact that virtually everyone in Washington seems oblivious to: The federal deficit has never fallen as fast as it’s falling now without a coincident recession,” Investor’s Business Daily reported last month. Assuming sequestration stays in place, the deficit is expected to shrink by 3.4 percent of the economy between fiscal year 2011 and 2013, and the only other times the budget deficit shrank that quickly—the start of Franklin Roosevelt’s second term, the post-World War II demobilization, 1960-61, and 1969-70—recessions quickly followed.
This isn’t an error; it’s a deliberate policy of austerity monomania, consequences be damned. Remember what John Boehner said weeks after he became speaker: “In the last two years, under President Obama, the federal government has added 200,000 new federal jobs,” Boehner said. “If some of those jobs are lost, so be it.” If anything is out of control, it’s the push for spending cuts, which, let’s not forget, is ongoing. The Congressional Budget Office has estimated that sequestration—the arbitrary, across-the-board spending cuts which started going into effect two weeks ago—will cost the economy another 750,000 jobs this year if left untouched.
The first couple of weeks of sequestration have produced a strange kind of euphoria on the right as lawmakers and activists alike preen over the cuts (“This was a necessary win for Republicans,” one anonymous GOP aide told National Review Online) while most of the inside-the-beltway attention has focused on whether President Obama oversold the effects of the cuts and criticism over White House tours having been canceled. Republicans run the risk, however, of becoming the proverbial frog in boiling water. At some point the real-world effects of the cuts, slowly building though they may be, will punch through their ideological bubble.
A week into sequestration, the Huffington Post surveyed how local television news reports have covered the cuts. Local stations “did tend to dig more deeply into the ramifications of the cuts, looking at how people around the country … will be affected in their daily lives,” the website reported. Those ramifications included Bell Helicopter in Fort Worth, Texas, trying to induce retirements in order to avoid having to fire people, while nearly two dozen county employees around Salt Lake City have been fired. It’s not hard to find other grim sequestration stories: Air Force civilian employee furloughs will cost Ohio $111.1 million in lost wages, according to the Dayton Daily News; Customs and Border Protection will start furloughing 60,000 employees in April; the Army, Marine Corps, and Coast Guard have suspended tuition assistance programs; control towers in more than 200 general aviation airports nationally are expected to be closed; dairy exports could fall by $500 million, according to Agriculture Secretary Tom Vilsack.
The list goes on—I know because Democrats have sent out regular roundups of such local news stories to demonstrate that the sequester has teeth. That’s also why Obama’s Organizing for Action grassroots group is collecting citizens’ sequestration stories.
And voters are taking notice, despite what much of Washington seems to think. A Washington Post-ABC News poll released Wednesday found 53 percent of Americans disapprove of sequestration while an amazing 72 percent disapprove of Republicans in Congress. And by a margin of 47-33, Americans hold that same congressional GOP responsible for the much-maligned spending cuts.
The question now is how long will it take for these feelings to gain discernible political traction. Specifically, will Republicans feel (dangerously) emboldened in August when the next debt ceiling showdown is expected, or will reality have chastened them?
By: Robert Schlesinger, U. S. News and World Report, March 15, 2013
“Ryan’s Blurred Vision”: What The New Republican Budget Reveals And Conceals
Someone needs to tell Paul Ryan that his party – and the economic platform of austerity and plutocracy he crafted for it – lost a national election last year. Someone also needs to tell the Wisconsin Republican that he still chairs the House Budget Committee mainly thanks to gerrymandered redistricting.
Someone clearly needs to remind him of those realities because the “vision document” he proposed on Tuesday as the Republican federal budget is only a still more extreme version of the same notions (and the same evasions) that he and Mitt Romney tried to sell without success last fall.
Voters decisively rejected that version of Ryan’s “path to prosperity,” with its gutting of the Medicare and Medicaid programs, its additional tax cuts for the wealthiest Americans, and its destructive cutbacks in education, infrastructure, scientific research, national security, and a hundred other essential elements of modern American life – and a decent future – that require effective government.
Indeed, the astonishing initial assessment of the new Republican budget by experts at the Center on Budget and Policy Priorities is that Ryan wants even deeper cuts and even more lavish tax cuts than he and Romney touted in 2012. The CBPP estimates that the new Ryan plan would cut $800 billion over the coming decade from an assortment of vital programs, including Supplemental Nutrition Assistance (SNAP, or food stamps); Supplemental Security Income (SSI) that supports the elderly poor; Pell grants for higher education; and federal school lunches, among others, along with the Earned Income Tax Credits (EITC) and Child Tax Credits that have historically improved standards of living for millions of impoverished working families.
Ryan pretends to admire Ronald Reagan, but the late president — who proudly extended and expanded the EITC — was far too liberal for the likes of him and Romney. Unlike the sunny Gipper, these sulking millionaires resent the working poor – the “47 percent” – who aren’t paying high enough taxes.
But everyone ought to know Ryan well enough by now to anticipate these cruel proposals. They ought to know, too, that Ryan would allow the entire edifice handed down to us by previous generations – highways, bridges, airports, canals, reservoirs, schools, parks, and much more – to crumble into oblivion, rather than increase taxes on the Republican donors whose wealth has multiplied so astronomically in recent years. His voice is the high-pitched drone of a generation of termites, voraciously consuming the nation’s foundations.
What everyone may not know is that Ryan’s vision of the future is quite blurry, since he again refuses to specify exactly how his budget allegedly achieves balance. It says (again) that the severest cuts will be made in domestic non-discretionary spending, but never details how much will be cut from which programs or even categories. It says (again) that tax expenditures will be reduced to balance those tax cuts for the rich, but never details those either. It says (again) that the Affordable Care Act will be repealed, although there is no chance of that happening now. And it says that defense spending – including untold billions in well-known waste – will simply be restored to pre-sequestration levels, while everything else will be cut again, starting at the post-sequestration baseline, much as Romney promised last year.
It says the federal budget will achieve balance within 10 years, but (again) there is no reason to believe its unfounded promises.
This old “new” budget demonstrates that no change is taking hold among the Republicans, except that they seem even more rigid in their ideological obsessions. No basis exists for bipartisan negotiation toward a budget compromise.
Without a massive public reaction to the Ryan proposals, the likelihood is that sequestration will continue and the Republicans will again seek to hold government hostage, as they have done repeatedly since 2009. And the nation will continue to suffer until voters finally decide, in their wisdom, to curtail the power of this truculent and implacable faction.
By: Joe Conason, The National Memo, March 13, 2013
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