OPINION - Want More Jobs in the U.S.? Scrap the Sequestration Cuts

"Either job creation is the top priority or it isn't" by Steve Benen, Maddow Blog 7/26/2013

I'd very nearly given up trying to convince the political world that sequestration cuts still matter.  But then yesterday, something changed my mind.

For those who still care about the policy that was designed to hurt the country on purpose, there's been quite a bit of news lately, all of it showing the sequester doing what it was intended to do.  In addition to the voluminous list of documented problems, just over the last few days we've gotten a better sense of the ways in which the policy is hurting the military, public schools, parks, and the justice system.  The poor and minorities are disproportionately suffering.

Did the political world care about these stories?  Not really.  Generally speaking, the slow-motion disaster on auto-pilot just keeps plodding along, with little more than indifference from the Beltway.

So what made yesterday different?  This did.

The nonpartisan Congressional Budget Office on Thursday estimated that keeping the spending cuts from sequestration in place through fiscal 2014 would cost up to 1.6 million jobs.

Canceling the cuts, on the other hand, would yield between 300,000 to 1.6 million new jobs, with the most likely outcome being the addition of 900,000, the CBO said.

The full CBO report, requested by Rep. Chris Van Hollen (D-Md.), is online here.

And why might this part of the sequestration story matter, even after the other elements of the story were largely ignored?  Because it offers the political world an important test.

A month ago, several congressional Republican leaders, including House Speaker John Boehner (R-Ohio), insisted publicly that job creation is their "number one priority."  If those claims were true, I have good news -- now they can prove they meant it.

After all, we now have independent confirmation that this one policy, if it remains in place, will cost the nation about 1.6 million jobs through next year.  End the policy, on the other hand, and the U.S. economy adds 900,000 jobs.

For those who say the job market is their "number one priority," this is what's commonly known as a "no-brainer."

Let's make this incredibly simple for Congress,  either job creation is your top priority or it isn't.  If it is, then the House and Senate could take five minutes, scrap the sequester, and help the U.S. job market.  A lot.

Is it really that simple?  Well, yes, actually it is that simple.

But won't that mean slightly higher spending levels?  And won't that mean slightly less deficit reduction?

Perhaps, but either job creation is your top priority or it isn't.  If someone says, "I'd like to end the sequester, but not if it means increased spending and higher deficits," then we know, in a very literal sense, that the jobs are not their "number one priority."

It's a straightforward, binary choice.  Your call, Republicans.

ECONOMY - Communities Prepare for Sequester Cuts

"Communities Prepare for Sequester Cuts to Staffing and Social Programs" PBS Newshour 5/7/2013

Excerpt

SUMMARY:  With no compromise in sight, communities across the country are bracing for sequester to kick in during the coming weeks.  Ray Suarez looks at effects for workers and government programs at the state-level.  Gene Grant of New Mexico PBS, Gretchen Frazee of WTIU and Flo Jonic of Rhode Island Public Radio share their perspectives.

RAY SUAREZ (Newshour):  Now an update on the impact of federal spending cuts known as the sequester.

The government must reduce spending in most programs across the board by $85 billion dollars this year -- the latest fallout, federal officials announced today they're postponing auctions for new oil and gas leases in California.  Those bids were planned for an area that features one of the largest deposits of shale oil in the country.

Staffing and budget problems were cited as one of the several reasons for the decision, but when it comes to tracking the effect of the sequester, it's a tricky thing.  While some cuts have already hit, others are still to come and some may be avoided.

One of the most immediate and visible changes, furloughs for air traffic controllers that led to flight delays, ended within a week of when the cuts took effect.  That's because Congress and the president signed a bill quickly providing new relief for the Federal Aviation Administration.

Some other furloughs, such as at the State Department, have been avoided through budgetary maneuvers.  But the president maintains incremental fixes are the wrong approach to the sequester.

VIRGINIA - Feeling the Effects of Sequester

"Southeastern Virginia's Military Industry Feels Effects of Sequester" PBS Newshour 3/28/2013

Excerpt

JUDY WOODRUFF (Newshour):  Defense Secretary Chuck Hagel said today that the Pentagon is trying to ease the impact on as many as 800,000 civilian employees, cutting the number of unpaid furlough days by a third.  Hagel credits a new spending bill signed by President Obama.  It gives the Defense Department more flexibility to deal with billions of dollars of across-the-board cuts that began on March 1st.

At a news conference this afternoon, however, Joint Chiefs of Staff Chairman General Martin Dempsey said that the Pentagon is still being forced to make difficult choices.

GEN. MARTIN DEMPSEY, Joint Chiefs of Staff Chairman:  On Monday, we will be halfway through the fiscal year, and we will be 80 percent spent in our operating funds.  We don't yet have a satisfactory solution to that shortfall.  And we're doing everything we can to stretch our readiness out.

To do this, we will have to trade at some level and to some degree our future readiness for current operations.  It will cost us more eventually in both money and time to recover in the years to come.  We will be trying to recover lost readiness at the same time that we're trying to reshape the force.  We can do it, but that's the uncomfortable truth.

RAY SUAREZ (Newshour):  Despite the Defense Department's efforts to mitigate the impact of sequestration on the nation's military readiness, the across-the-board budget cuts are already starting to take a toll in communities where federal spending is the backbone of the local economy.

That's true of southeastern Virginia.

POLITICS - When the Sequester Pain Hits

"Last Minute White House Meeting on Sequester Spurs Political Combat Not Progress" (Part-1) PBS Newshour 3/1/2013

JUDY WOODRUFF (Newshour):  The final hours ticked down today to the much-talked about sequester, $85 billion dollars in automatic across-the-board federal spending cuts.  A White House meeting produced little, except a new round of political combat.

The top two Democrats in Congress trooped to the executive mansion this morning, along with the top two Republicans.  But the hour-long session with the president produced no breakthroughs.  And minutes later, he appeared in the White House Briefing Room, making clear what he thinks of the sequester.

PRESIDENT BARACK OBAMA:  We shouldn't be making a series of dumb arbitrary cuts to things that businesses depend on and workers depend on, like education and research and infrastructure and defense.

JUDY WOODRUFF:  The president was also adamant on where the blame lies, with those who balked at erasing tax loopholes for the wealthy and other revenue-raisers.

PRESIDENT OBAMA:  None of this is necessary.  It's happening because a choice that Republicans in Congress have made.  They have allowed these cuts to happen because they refuse to budge on closing a single wasteful loophole to help reduce the deficit.

JUDY WOODRUFF:  But Republicans were having none of it.  Shortly before the president emerged, House Speaker John Boehner again rejected the demand for more taxes.

REP. JOHN BOEHNER, R-Ohio:  The president got his tax hikes on January 1.  This discussion about revenue, in my view, is over.  It's about taking on the spending problem here in Washington.

JUDY WOODRUFF:  The president now has until just before midnight to issue an order that makes the cuts official.  It will be weeks before many of the effects are felt.  But within days, federal agencies will start sending out notices that hiring freezes and furloughs are coming.

In addition, the Associated Press reported 2,000 illegal immigrants in detention were released in recent weeks to save money on jail costs.  The administration had said the number was a few hundred.  And newly installed Defense Secretary Chuck Hagel said today the military is implementing the largest cuts in nearly 30 years.

DEFENSE SECRETARY CHUCK HAGEL, United States:  Let me make it clear that this uncertainty puts at risk our ability to effectively fulfill all of our missions.

JUDY WOODRUFF:  The Army has curtailed training for nearly 80 percent of combat brigades.  And, in Norfolk, Va., home to the Navy's Atlantic Fleet, the aircraft carrier Harry Truman sits idle.  It was to have sailed for the Persian Gulf last month.

Back at the White House today, the president voiced frustration at suggestions he should have done more to prevent all this.

PRESIDENT OBAMA:  Most people agree I'm presenting a fair deal.  The fact that they don't take it means that I should somehow, you know, do a Jedi mind meld with these folks and convince them to do what's right.

JUDY WOODRUFF:  One thing both sides did seem to agree on, the need for a stopgap bill to keep the government running past March 27, when it runs out of funds.

JOHN BOEHNER:  And I'm hopeful that we won't have to deal with the threat of a government shutdown while we're dealing with the sequester at the same time.  The House will act next week, and I hope the Senate will follow suit. Thanks.

JUDY WOODRUFF:  House members and senators are due to return to Washington Monday.

"Assessing Impact of Sequester Cuts at Local and Federal Levels" (Part-2) PBS Newshour 3/1/2013

Excerpt

SUMMARY:  To learn how the sequester cuts will have impact on both the federal and local levels, Jeffrey Brown talks with Ed O'Keefe of the Washington Post, Karen Kasler of Ohio Public Television and Megan Verlee of Colorado Public Radio.

COMMENT:  Hopefully, as this starts hurting American citizens' pocketbooks, we will realize the lie about demonizing 'federal spending.'  The USA is a consumer driven economy and the biggest  consumer is government (local, state, federal) and that the majority of government tax dollars end up in our pockets, in our economy.  It is government spending that buys much of our products, pays much of our income, and supports us in need.

POLITICS - Sequestration, a 'Dr. Strangelove' Idea

Reminder, the FED is independent from the Administration and Congress.

"Fed Chair Bernanke Warns Lawmakers Sequester Could Slow Economic Recovery" PBS Newshour 2/26/2013

Excerpt

GWEN IFILL (Newshour):  The federal government moved another day closer today to $85 billion in automatic spending cuts. And as political charges and countercharges flew, Federal Reserve chief Ben Bernanke raised new fears about the potential economic fallout.

The Fed chairman told a Senate committee that forcing across-the-board spending cuts could slice half-a-percentage point off economic growth.

BEN BERNANKE, Federal Reserve Chairman:  I think an appropriate balance would be to introduce these cuts more gradually and to compensate with larger and more sustained cuts in the longer run to address our long-run fiscal issues.

GWEN IFILL:  Bernanke said the sequester was supposed to be a doomsday weapon designed to spur compromise.

BEN BERNANKE:   It was done to be sort of like "Dr. Strangelove," you know, the bomb that goes off.  So, obviously, if you can find a way to, you know -- in a bipartisan way to make it more effective and better prioritized, that would be a good thing.

Significant excerpt

REP. JOHN BOEHNER, R-Ohio, Speaker of the House:  Now, the American people know the president gets more money, they're just going to spend it.  And the fact is, is that he's gotten his tax hikes. It's time to focus on the real problem here in Washington, and that is spending.

NO KIDDING!  That is what government (local, state, federal) is mandated to do with tax income, which is government's paycheck.  That is what I do with my paycheck, spend it.

POLITICS - Sequestration, What's Reality and What's Hype?

"Transportation Secretary Warns Sequestration Would Disrupt Air Travel" PBS Newshour 2/22/2013

Excerpt

SUMMARY:  With sequestration due to take effect in a week, Transportation Secretary Ray LaHood warned that automatic spending cuts would disrupt air travel and cause a myriad of problems.  Lisa Rein of the Washington Post joins Ray Suarez to discuss about what's reality, what's hype, and the Republican response to the imposing cuts.

POLITICS - Economic Threat of Sequestration

"Congressional Sequestration Squabble Has Local Economic Resonance in Virginia" PBS Newshour 10/23/2012

Excerpt

SUMMARY: In the latest installment in our Battleground Dispatches series, Cathy Lewis of WHRO in Hampton Roads, Va., looks at how concern over sequestration is playing out as a local voting issue. Gwen Ifill talks to Roll Call's Steve Dennis and Josh Rogin of Foreign Policy about how congress is working on facing its budget negotiations.

GWEN IFILL (Newshour): Another topic raised last night (final Presidential debate): the cost of slashing the federal government. Congress agreed to deep across-the-board cuts known as sequestration as part of a deal to raise the nation's borrowing capacity.

But President Obama said those cuts, which would kick in January 1, are avoidable.

PRESIDENT BARACK OBAMA: First of all, the sequester is not something that I have proposed. It is something that Congress has proposed. It will not happen.

The budget that we are talking about is not reducing our military spending. It is maintaining it.

JUDY WOODRUFF: It is up to Congress in the lame-duck session after the election to resolve the issue of sequestration. But the prospect of those cuts, in particular for defense, has some voters worried, especially those who live in Southeastern Virginia.

That area, with its large military population, is focused on how the cuts would affect the local economy.

Our story comes from Cathy Lewis of WHRO in Hampton Roads and is part of our new collaboration with public media partners across the country. We're bringing you reports from areas that will likely dictate the outcome of the election in a series we call Battleground Dispatches.

COMMENT: "It is up to Congress in the lame-duck session after the election to resolve the issue of sequestration." Don't hold your breath, especially if President Obama wins. The Republican No-Governance Party in the House will continue their extremest stance.