Don’t Sequester Me Bro!

by Bradley Brown

It is no secret that the United States is fiscally troubled.  At the time of this article, the national debt is around 16.8 trillion dollars. That is trillion with a “T”. Want to go back to when the US was debt-free? You would have to return to January 1835, just before the Civil War, when the United Statespaid off its final dollar of debt accumulated from the War of 1812 and the Revolutionary War. Sound like a long  time ago? It is, but enough nostalgia.

The United States Congress has been wrestling with the ever growing debt since the late 1970s, when the debt really started to accumulate. You may have heard the major media outlets buzzing about the fiscal cliff and more recently, the sequester. The buzz is mostly bad, but just what is the sequester?  To understand the sequester, we need to go back to August 2, 2011 where Congress passed the Budget Control Act of 2011. The BCA created a special super committee called the Joint Select Committee on Deficit Reduction which was tasked with finding spending cuts in order to prevent default from the debt-ceiling crisis. The idea was to make small, tailored cuts to the budget to decrease the deficit by $1.5  trillion over the following ten years. Surprise, surprise! The BCA failed to make a single cut. On  November 21, 2011 the committee released the following statement: “After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline.”

The committee was disbanded on January 31, 2012.  So no cuts were made, which means all items are essential and we should continue to accumulate debt to finance these programs, right? Well, here is the kicker. The Budget Control Act had automatic, bipartisan spending cuts built into the plan which were due to take effect on January 1, 2013. These cuts, also called “sequestrations”, were put in place to motivate both sides of the aisle. Defense spending cuts totaling around 7.9% were created to scare the Republicans, while all non-defense spending would be cut by about 5.8% to mobilize the Democrats [2][7]. With the Bush Tax Cuts set to expire in 2013, the perfect storm of automatic spending cuts and increases in taxes began to form, thus creating the “Fiscal Cliff.” President Obama signed the American Taxpayer Relief Act of 2012 into law on January 2, 2013 which made most of the lower level tax cuts created by the Bush Tax Cuts permanent, but did nothing for the federal deficit. And so on March 1, 2013, the sequestrations began to take place, with the most visible kicking in around early April, when government employee furloughs started taking place. This meant fewer TSA agents, FBI agents, Federal Aviation Administration employees, to start.

What the BCA did not take into account is the extreme ineptitude that characterizes our government. Even with a gun to their heads, Congress could not find cuts.  How about the Transportation Security Administration, which costs about $7.9 billion dollars annually and has yet to catch a single terrorist? Or the Department of Homeland Security, which ensures a “safe” United States to the tune of $59 billion. Slash the Drug Enforcement Agency, allowing local law enforcement to monitor the use of substances by consenting adults.  Foreign aid could also use some tending to, as the United States government is currently sending billions of dollars to countries like Israel and Egypt for military spending. For sanity’s sake, that is all that will be said of the fiscal black hole known as the United States military.

In 2011, the Government Accountability Office (GAO) audited the federal spending activities and cited, “The U.S. Government Accountability Office cannot render an opinion on the 2011 consolidated financial statements of the federal government, because of widespread material internal control weaknesses, significant uncertainties, and other limitations.” In other words, the federal government is so disorganized that it is literallyimpossible to review their spending habits.

If we have one thing to learn from this period of uncertainty, it is that government is the problem.  Congress ran up their tab and now they cannot pay.  This is equivalent to someone creating a massive credit card debt and not paying, so then the repo guys come and take their belongings indiscriminately.  This person could have made spending adjustments over time and still kept the possessions they cared most about by being frugal and prioritizing needs. But it is too late for that. The repo men do not care how often you use that laptop, or what you need the car for. While mostly met with opposition, the sequestrations should be greeted with open arms. Without it, nothing would have been done. It would have been, “Oh well, there is nothing we can cut! Back to business as usual!” The sequestration created accountability, and as difficult as it will be for the members of Congress to see the cuts, it is absolutely necessary. They need to get used to the idea of downsizing, or else the United States will be facing a grim future of instability.

 

 

1.
http://www.gao.gov/special.pubs/longterm/debt/index.html (national debt history)

2.
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/20/the-sequester- absolutely-everything-you-could-possibly-need-to-know-in-one-faq/ (Epic sequester information)

3. http://cybercemetery.unt.edu/archive/deficit/20120113174127/http://www.deficitreduction.gov/public/index.cfm/pressreleases?ID=fa0e02f6-2cc2-4aa6-b32a-3c7f6155806d (BCA committee statement)

4.
http://www.gpo.gov/fdsys/pkg/PLAW-112publ74/pdf/PLAW-112publ74.pdf (Budget links)

5.
http://gbk.eads.usaidallnet.gov/data/fast-facts.html (US aid to foreign countries)

6.
http://www.gao.gov/press/financial_report_2011dec23.html (GAO press release of 2011 audit)

7.
http://www.cbo.gov/publication/42754 (CBO info about sequester and budget reduction projections)

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