Once Congress, the Administration and the talking heads on every cable network have wrung the last bit of anxiety out of the general public over how their lives will be decimated by the advent of mandatory federal budget cuts – “sequestration” – on March 1, and once Congress and the White House have squeezed the last bit of political mileage out of the blame game, how bad will sequestration be?
My guess is few if any of those dire predictions will come to pass. People will not die for lack of health care; schools will not close; there will be no three-hour lines at airports, nor will airports and train stations close; food inspection will continue; our borders will continue to be protected, and federal employees will not be furloughed by the tens of thousands.
Depending on whose calculations you believe, it appears sequestration — in full force and adjusted for inflation — would reduce the federal budget to levels spent by the government in FY2008-2009. The bottom line is complicated by the fact we’re about half way through the current fiscal year, as well as the increase in federal spending during the intervening fiscal years, i.e. new programs, expanded programs, inflation-adjusted costs, etc.
The factors in play are the following: The 2011 Budget Control Act from whence sequestration emanates requires the federal government to lop about $1.2 trillion out of spending/deficit/debt over 10 years. This year’s share of sequestration reductions requires mandatory across-the-board cuts of about $85 billion out of a FY2013 federal budget of roughly $2.9 trillion and change. This translates to a required overall percentage budget cut of about 0.03%. Sequestration technically kicks in March 1, but nearly all departments and agencies are said to have sufficient cash on hand to operate through the end of the month at least. Federal employee furloughs, either by White House fiat or by dint of labor contract, require at least 30 days’ notice. The continuing resolution keeping the federal government operating at FY2012 spending levels since last October 1 expires March 27.
Contrary to some media messengers, no one in Congress truly embraces sequestration primarily because it’s budget cutting with a meat cleaver when a scalpel is the appropriate tool. For budget hawks on both sides of the aisle and in both chambers, sequestration may not be the perfect solution to federal debt, but it is seen as a means to an end. Unsuccessful in drastically cutting or freezing federal spending, sequestration achieves in a very ham-handed way control over the federal budget they’ve sought for a long time. For moderate and liberal wings of both parties, it may “control” spending, but will do so at the expense of citizen health and welfare, economic recovery and will create chaos in the country.
If you know Washington, you know the notion of shutting down the entire federal government scares Congress and the White House far more than sequestration. The real deadline to be watching then is not March 1, but March 27. If Congress doesn’t act by the end of the month to defer or defuse sequestration and move to keep the government running either through an omnibus spending bill that incrementally increases FY2013 budgets or through simple extension of the current continuing resolution, then things could start to get ugly.
So, Congress has two March deadlines, and ever the efficient entity that it is, it will likely tackle both of its spending challenges at the same time. Why legislate twice when you can hold either side of the budget issue hostage with a single bill?
Whether spending for the rest of the year – calendar or fiscal – is provided through an omnibus appropriations bill or an extension of the current continuing resolution, the remedy to sequestration will be part of that package. How will it be dealt with? Likely not through a reformulation of spending cuts, but more likely will the cuts will be deferred again at least until after appropriations is dealt, after the April 14 deadline for the respective chambers to pass their budget resolutions and until after the White House finally submits its budget recommendations.
Fingers crossed.
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