sequestration

Sequestration and Voter Ignorance

Written by Tad DeHaven, a budget analyst at the Cato Institute. Posted with permission from Cato @ Liberty.

Sheldon Richman and I spent a lot of time last week running through numbers from the Congressional Budget Office in order to gauge sequestration’s effect on federal spending. In the resulting column, Richman lays out the numbers and asks a pertinent question: How the $#!?% is the average voter supposed to have a clue about this stuff?

From Richman’s column:

I subjected myself to this pain because I’m a professional masochist. I’m paid to do it. How many people who are not so rewarded are likely to search for, locate, and download CBO spreadsheets to see the numbers for themselves? Very few, I’ll bet. And who can blame those who won’t? They have families, friends, communities, and jobs to attend to — matters they actually affect through their actions. But if most people don’t have time or incentive to learn the facts about this one issue (never mind all the others) — and if the news media can’t be counted on to tell the plain story — how can Americans fill the role of “informed voters” that democracy in theory requires?

Next year there will be congressional elections. If a voter doesn’t know the facts about the budget, she won’t be able to judge the sequestration issue. And if she can’t do that, how can she intelligently decide which congressional candidate to vote for?

Sequestering ObamaCare’s Employer Mandate

Last week, Senators Orrin Hatch (R-UT) and Lamar Alexander (R-TN) introduced the American Job Protection Act to repeal the ObamaCare employer mandate (a.k.a. the pay or play rules, or the employer “shared responsibility” rules).  Companion legislation was also introduced in the House on the same day.  Full text of the bill is available here.

As FreedomWorks reignites the movement to defund ObamCare in the House as we near the end of the CR on March 27, the American Job Protection Act offers a strong second front against one of ObamaCare’s most damaging provisions.  Sadly, full repeal is not politically feasible right now.  But that doesn’t mean we can’t keep trying to chip away at its more unpopular provisions through bills like this.

It’s Been Done Already
Let’s not forget that we’ve already repealed some of the nastier programs and mandates in prior legislation.  As nicely summarized in this post on Forbes by Grace-Marie Turner, the law’s government takeover of the long-term care industry called the CLASS Act, a major piece in the original legislation, is now history.  Other chunks now out for scrap include the burdensome $600 1099 reporting requirement and the odd employee free choice voucher, which would have allowed certain employees to apply their employer health plan contribution to the cost of coverage on the ObamaCare exchange.

Sequestration: An Inside Perspective

In two days, the sequestration axe will either drop, or it won’t.  Personally, I am about as close as you can get to the situation, and I have no idea how it will turn out.  While the “national security” argument against sequestration was gradually left behind, the arguments against the cuts have become increasingly economic in nature.  These arguments are problematic at best and disingenuous at worst.

A while back, I proposed a couple of ways to gradually cut more than sequestration does, therefore creating less pain in the current fiscal year; but as dieting often fails, cutting swiftly might be the only surefire method to actually cut spending.  Putting the cuts into perspective, as George Will did in his article this weekend, $85 billion from a $3.6 trillion budget, or 2.3%, is miniscule. The “draconian” cuts merely return us to 2006 levels.

I have been advocating deeper cuts for some time now, and as a defense contractor, am prepared to lose my job as a result (although I don’t expect to). I will try to be as objective as possible herein as I offer a couple of personal thoughts as we draw closer to the actuality of sequestration:

Sequestration Will Not Make the United States Less Safe

Written by Christopher Preble, Vice President for Defense and Foreign Policy Studies at the Cato Institute. Posted with permission from Cato @ Liberty.

Will sequestration undermine U.S. national security? Hardly. Today, the Cato Institute released a new infographic putting these minor cuts in perspective.

Military spending will remain at roughly 2006 levels—$603 billion, higher than peak U.S. spending during the Cold War. Meanwhile, we live in a safer world. The Soviet Union has been dead for more than two decades; no other nation, or combination of nations, has emerged since that can pose a comparable threat. We should have a defense budget that reflects this reality.

To be clear, sequestration was no one’s first choice. But the alternative—ever-increasing military spending detached from a legitimate debate over strategy—is worse. We should have had such a debate, one over the roles and missions of the U.S. military, long before this day of reckoning. And politicians could have pursued serious proposals to prudently reduce military spending. Instead, they chose the easy way out, avoiding difficult decisions that would have allowed for smarter cuts.

Another speech from Obama, another huge disappointment

Obama gives State of the Union

Last night during a joint session of Congress, President Barack Obama gave his fifth the State of the Union address where he laid out his agenda for the next year. As was anticipated, the speech carried over the Leftist themes of last month’s inaugural address and was more aggressive in tone.

Despite recent GDP numbers showing that the economy contracted in the last quarter of 2012, President Obama started off the hour long speech by repeat a familiar line, explaining that “[t]ogether, we have cleared away the rubble of crisis, and can say with renewed confidence that the state of our union is stronger.”

After a couple of shots at Congress, President Obama spent a few minutes discussing the sequester, claiming that “both parties have worked together to reduce the deficit by more than $2.5 trillion – mostly through spending cuts, but also by raising tax rates on the wealthiest 1 percent of Americans.” Obama claimed, “we are more than halfway towards the goal of $4 trillion in deficit reduction that economists say we need to stabilize our finances.”

If only that were true. In Cato Institute’s response to the State of the Union address, Michael Tanner explained, “Let’s be absolutely clear — there have been no spending cuts under this President.”

In 2010, the first year that this President was responsible for the budget, the federal government spent $3.4 trillion,” noted Tanner. “Last year, the federal government spent $3.5 trillion, and for the first four of last year, we’re spending at a fast pace than the first four months of last year.”

Why The Sequester Is Important

United States Capitol

On March 1st, the so-called sequester which is a series of automatic spending “cuts” that were agreed to in 2011 are supposed to take effect. The “cuts” are supposed to be around $1.2 trillion over 10 years spread equally among defense and non-defense spending. Democrats are complaining how women, children, and old people will be (insert one or more of the following here) starved, made homeless, and/or impoverished by the “cuts” in social welfare programs. Republican defense hawks are claiming that sequester will destroy the US military. Both groups also claim the sequester will put the economy back into recession and/or maybe even a depression. Indeed, both groups say that the sequester should be avoided at all costs and that we should “raise revenues” which is Washington speak for raising taxes to cover the amount that was supposed to be “cut”. However, if we are ever going to get our nation’s fiscal house in order, we have to allow the sequester to take effect.

Why I Hate The Sequester

Although I do believe that the sequester must be allowed to take effect, I don’t like it. For starters, $1.2 trillion in “cuts” (which are not actual budget cuts but instead are merely reductions in the rate of spending growth) is a very small amount when you look at how grave the nation’s financial condition is.

Secondly, the sequester does nothing to address entitlement programs like Social Security and Medicare which are the two long-term drivers of future financial problems.

Third, the Democrats do have a point when they say the cuts fall disproportionately on non-defense spending. The Department of Defense is the largest single item of discretionary spending and all other agencies combined do not equal it. But the DoD is only taking 50% of the cuts.

The Sequester May Not Be ‘Fair,’ but It’s Real and It Would Slow the Growth of Government

Written by Daniel J. Mitchell, a senior fellow at the Cato Institute. Posted with permission from Cato @ Liberty.

Much to the horror of various interest groups, it appears that there will be a “sequester” on March 1.

This means an automatic reduction in spending authority for selected programs (interest payments are exempt, as are most entitlement outlays).

Just about everybody in Washington is frantic about the sequester, which supposedly will mean “savage” and “draconian” budget cuts.

If only. That would be like porn for libertarians.

In reality, the sequester merely means a reduction in the growth of federal spending. Even if we have the sequester, the burden of government spending will still be about $2 trillion higher in 10 years.

The other common argument against the sequester is that it represents an unthinking “meat-ax” approach to the federal budget.

But a former congressional staffer and White House appointee says this is much better than doing nothing.

Here’s some of what Professor Jeff Bergner wrote for today’s Wall Street Journal:

Real Defense Budget Alternatives

With the “fiscal cliff” behind us, it’s important to remember that in less than two months, the Congress will be dealing with another manufactured crisis: The budget cuts of the 2011 Budget Control Act known as “sequestration.”  The Department of Defense will bear 41% of the prescribed cuts, eliminating an additional $492 billion over 10 years.  Although entitlement spending will also be on the table, the initial fight will be over cuts to the Defense budget.

A new study by the nonpartisan RAND Corporation concludes that the defense budget cuts cannot be taken without altering our overall defense strategy, and that “the department should modify defense strategy to fit the new resource constraints and prepare its course of action sooner rather than later.”

The authors highlight three alternative strategies, which anyone interested in this topic should read and consider.  An accompanying article by the authors states, “Reductions of the magnitude implied by sequestration—some $500 billion over the coming decade—cannot be accommodated without a re-examination of current defense strategy.”

Obama, Romney discuss foreign policy, military spending in final debate

Obama and Romney debate

President Barack Obama and Mitt Romney met for the third and final debate last night at Lynn University in Boca Raton, Florida to discuss foreign policy, though economic policy came up at times.

The candidates went back and forth on policy in the Middle East and toward China. Romney was given a chance during the first question to discuss Libya and the attack on the consulate that led to the death of Ambassador Christopher Stevens and three other Americans, but he punted, letting Obama control the narrative on that particular issue.

Obama tried to paint Romney as someone who frequently changes positions when it’s convenient. Obama also explained several times that he didn’t believe in “nation-building,” saying that it was time for “nation-building at home.”

Romney turned the debate toward economic issues during a question about whether or not he would have stuck with Hosni Mubarak in Egypt. While he answered the question, Romney segwayed, explaining, “[W]hen the president of Iran, Ahmadinejad, says that our debt makes us not a great country, that’s a frightening thing.” Romney noted the words of Admiral Mike Mullen, who explained that the national debt is a security threat to the United States.

While noting this threat, Romney disappointed anyone who was hoping that he would put forward a viable solution to fix it. Romney explained, “I’m going through, from the very beginning, we’re going to cut about 5 percent of the discretionary budget excluding military.” As explained last week, that’s not at all a significant part of the budget, coming it at around $42 billion or so. So Romney’s great budget plan effectively does nothing.

GOP Groups’ Ads on Sequestration, Defense Jobs Are Misleading

Written by Christopher Preble, Vice President for Defense and Foreign Policy Studies at the Cato Institute. Posted with permission from Cato @ Liberty.

It is no surprise that the defense contractors want to protect their profits by getting taxpayers to pony up more money. Now they have secured the support of Crossroads GPS in a commercial against Senate candidate and former Virginia governor Tim Kaine. The Crossroads ad follows similar ones from Kaine’s challenger, George Allen, and the National Republican Senatorial Committee. All three ads claim that spending cuts under sequestration will result in devastating job losses to the defense industry and Virginia; the Crossroads ad claims 520,000 jobs will be lost. But these estimates are wildly inflated and represent the short-term interests of the defense industry, not the American taxpayer.


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