Sequestration: $85 Billion or $42 Billion??
Politically charged rhetoric shrouds even the most basic of basic data about sequestration. Specifically… how much actual spending will be cut in budget year 2013?
This key question is relevant because President Obama is making dire predictions of an imminent collapse of government services and employment that threatens the economic recovery right now. The President says it’s being brought on by harsh sequestration spending cuts.
After a failed meeting with Congressional leaders earlier today the President said:
every time that we get a piece of economic news, over the next month, next two months, next six months, as long as the sequester is in place, we’ll know that that economic news could have been better
– President Obama, 2/28/2013
White House Press Secretary Jay Carney this morning ominously reported:
It’s our responsibility to be upfront about the fact that you cannot responsibly cut $85 billion out of the budget in seven months
– Jay Carney, 2/28/2013
The President is making political hay by dramatically signing the required sequestration order at 11:59:59 tonight… literally the last second.
Set aside that Carney and the President have known this day was coming for a year and seven months and that the Administration did little to prevent or prepare for it.
Worse than that, the President runs around making speech after speech yet doesn’t even have a key fact strait. There is no excuse for that.
CBO Forecasts $42 Billion in Spending Reductions for Fiscal 2013
The CBO’s annual Budget and Economic Outlook report was released on February 5th. For budgeting decisions it is the most important factual reference of the year.
According to the CBO, $42 billion will be reduced this fiscal year, not $85 billion as widely reported by the national media.
The CBO deemed that fact so important that it was fully explained in an FAQ on sequestration answering this question:
Why Does CBO Expect the Sequestration to Reduce Outlays by Just $42 Billion in Fiscal Year 2013 Even Though the Automatic Budget Cuts Total $85 Billion This Year?
– CBO, 2/28/2013
The spending reduction this year is $42 billion, not $85 billion as Carney said, and the Administration is fully aware of that through the CBO and White House OMB.
$42 billion is a pittance compared to a projected $3.55 trillion budget.
Most important of all, though…
There are no actual spending cuts at all this year. Not a one!!
Even with the sequester figured at $85 billion for this year, the CBO’s projected 2013 budget is still bigger than 2012’s actual spending.
The $42 billion is only a reduction in the projected growth rate of spending, not an actual reduction in spending. U.S. states make similar reductions regularly without a whimper.
It’s time for the Administration to stop predicting an economic calamity over which it has no control. That is counterproductive.
Its time for everyone to stop playing the sequestration blame game.
It’s time to take the bull by the horns and trim some fat from a bloated federal budget. Start by reducing the appalling $115 billion in annual federal government over-payments, instead of cutting programs for the needy.
It’s time for the President and the Administration to be fully honest about what is actually happening and buckle down to do what must be done for the good of the nation.