Category Archives: planned cuts in lieu of automatic cuts

Avert the Sequester Cuts

It looks like Republicans and the Democrats have decided to let the sequester budget cuts happen. If some budget cuts are not made by March 1st the sequester will automatically go into effect. Many economists believe that letting the sequester cuts dictate austerity will hurt our economy and send us back into high unemployment and possible recession. I can’t imagine why anyone would want to reverse the modest gains we currently are seeing in our economic health. Republicans have certainly stressed that they want to see smaller government, less spending and deficit reduction. Although I am not a fan of small government, I do not have a problem with less spending and deficit reduction, however, I agree with Paul Krugman that cuts should not be made until our economy is much stronger. We do need to spend some money in order to make some money. We need to invest in education at all levels, we definitely need to update our infrastructure; we need our government to try to stimulate job development, investor confidence, and consumer confidence. Obama has offered to put his “grand bargain” back on the table, but it seems there are no takers. Are Republicans playing chicken again, or trying to somehow divert blame for the sequester cuts to Obama? Have the Democrats disappeared again?  I don’t see any of these strategies ending in success for the GOP or for the Democrats.

In The Daily Beast for February 6, 2013, Eleanor Clift writes an article entitled, Sequester Looms as Democrats and GOP Make Little Effort to Resolve Impasse. She agrees with Krugman that the sequester could be disastrous for our fledgling economic recovery. She mentions a group called The Third Way which has come up with an alternate plan. Here is some of what Clift had to say:

“Our economy right now is headed in the right direction and it will stay that way as long as there aren’t any more self-inflicted wounds coming out of Washington,” he [Obama] said, urging Congress to come up with a smaller package of spending cuts and tax reforms “to delay the economically damaging effects of the sequester for a few more months” to give lawmakers time to come up with an alternative. It’s what Congress just did with the debt ceiling extension, putting it off for three months until mid-May.

What’s most striking about the looming sequester is the lack of any real activity on either side, Democrat or Republican, to resolve the impasse. Instead, both parties seem to be sleepwalking their way to sequester, calming themselves with the rationale that letting it happen might not be that big a disaster. And they’re right—up to a point. “Sequestration is a disgrace, a congressionally made disgrace,” says Jim Kessler, of Third Way, a centrist Democratic group. “But it’s not the fiscal cliff—it can happen and life goes on.”

Going over the fiscal cliff would have meant the U.S. defaulting on its debts and precipitating a global financial meltdown. Sequester takes a chunk out of defense spending and a chunk out of discretionary domestic spending, but it spares Social Security, Medicare and Medicaid, and Pell grants. Republicans would rather accept deep cuts in defense spending than give Obama any more tax revenue, and with Democratic priorities protected, how bad can it be? Obama seems to be taking the same approach he did on the debt ceiling, leaving it up to Congress to figure a way out, but Congress so far is punting.”

“Third Way is a policy shop, and it’s been quietly shopping a budget plan that would replace the sequester with an equal amount of spending cuts, but done in a different way. The defense cuts would go through the orderly legislative process of putting together a budget, “using a scalpel and not an ax.”

The discretionary cuts would be eliminated and replaced with entitlement cuts. The theory here is that domestic discretionary spending has been battered enough and it’s where all the investing in the future is done—education, health research, energy, roads and bridges. Why should the government jump through hoops to make sure Warren Buffettdoesn’t pay more for Medicare while kids pay more for school lunches?

Republicans, having swallowed a tax hike on the wealthy, have been adamant about no more new revenue, but Third Way would reach back to the presidential campaign and borrow Mitt Romney’s idea of eliminating loopholes in the individual tax code. Romney suggested capping deductions for people who make more than $250,000. The Third Way plan would cap deductions at $35,000 for high earners, with an exemption for charitable deductions. That would raise $400 billion and affect just the top 2 percent.”

I’m thinking about making a magnet to put on my car that says Do Your Job: Avert the Sequester. Write your congressional representatives. Pester Washington every day until they do something. They are threatening to cut the pay for our soldiers. Is this another strategy to get people involved in this sequester issue? Do you think the sequester cuts are a good idea? I know we are all sick of the nonsense perpetrated by Congress of late, but they should not govern in a vacuum; they should have to hear from us, their constituents, constantly.