by Michael Tanner
"The sequester is coming, the sequester is coming,” cries Chicken
Little, speaking of the across-the-board spending reductions set to kick
in next Friday. As a result, much of the Washington establishment,
politicians of both parties, and the media are bracing for the
apocalypse.
Henny Penny worries about poisoned meat going uninspected, the air
traffic control system shutting down, and schools being forced to close.
Meanwhile Turkey Lurkey is afraid that national security is threatened
because our military will be gutted. And Foxy Loxy is concerned there
will be massive job losses and our economy will crash.
The reality, though, is that most of what we are being told about the sequester is just a fairy tale. Here’s why:
The sequester imposes savage spending cuts
Actually, the sequester doesn’t cut federal spending at all, or
rather it cuts it only in the Washington sense of any reduction from
projected baseline increases is a cut. In reality, even if the sequester
goes through, the federal government will spend more every single year.
In fact, in 2023 it will be spending $2.39 trillion more than it does today.
OK, but at least the reductions in projected spending are big, right?
Hardly. This year, the sequester would slow the growth in federal
spending by just $85 billion, from an expected, pre-sequester budget of
$3.64 trillion — less than a 2.3% reduction. To put that in perspective,
the federal government borrows $85 billion every 28 days . In fact,
this actually overstates the size of this year’s cuts. Because of
ongoing contracts and the Byzantine labyrinth of federal budgeting,
only $44 billion of that $85 billion will
actually be cut from this year’s budget. The rest will be cut in future
years, but attributed to this year’s budget. So, the real reduction in
federal spending this year is just 1.2%. If the federal government can’t
reduce spending by less than a penny-and-a-half on the dollar without
throwing us into the dark ages, something is truly wrong.
But aren’t the cuts larger for domestic discretionary spending?
It is true that the cuts are not spread equally across all types of
federal spending. Entitlement programs, such as Medicare, Medicaid
and Social Security are generally exempt — Grandma’s Social Security
check won’t be cut — meaning that discretionary spending takes a
disproportionately larger hit. Still, we are talking about a reduction
of less than 9%. That would leave domestic discretionary spending, after
adjusting for inflation, at roughly the same level as 2009. You recall
2009, don’t you? The starvation, the mass closure of our schools, the
shutdown of the transportation system, the burning cities?
No comments:
Post a Comment