Tuesday, February 26, 2013

Why Everything Republicans Are Saying About The Sequester Is Wrong

Barring a last minute Congressional compromise, $85 billion in automatic across-the-board cuts will go into effect in the next 72 hours as a result of the sequester mechanism included in the 2011 Budget Control Act.

Republicans — many of whom voted for the BCA and have for years championed deep spending reductions — are hoping to blame the Democrats and President Obama for the consequences of the cuts, claiming that if “bad things” happen as a result of sequester, “it’s because [Obama] wants them to.” As the nation moves closer to the March 1 deadline, here is your guide to the GOP spin on the sequester:

1. We need spending cuts to get the economy going. The GOP claims that government spending is out of control and reason that reducing spending would spur greater economic growth. But government expenditures have grown at its slowest pace since the Eisenhower administration under President Obama and the latest projections from the Congressional Budget Office show that the nation’s deficits have shrunk by trillions of dollars, and the debt is close to being stabilized as a percentage of the economy. Austerity measures have dragged down economic growth in Europe and some economists argue that sequestration won’t actually lead to substantial shrinking of the deficit, since fiscal contraction caused by sequestration is likely to slow economic growth, reducing tax revenue and preventing meaningful deficit reduction.

2. Agencies need more flexibility to avoid cuts in crucial services. After backing sequestration mechanism — the harmful cuts that were designed to force lawmakers to reach a comprehensive deal to reduce the deficit with additional revenue and spending reductions — Republicans are now considering legislation that would leave Obama and federal agencies with the responsibility of carving out waste and unnecessary spending while preserving critical government services. In reality, the problem isn’t one of authority. Programs will see their budgets cut by anywhere between 2 and 10 percent and most will be unable to salvage services and only target inefficiencies. The Republican replacement is just another effort to implement spending reductions without increasing revenues and blame Obama for the consequences.

3. The federal spending will still be higher next year. This claim is technically true, but only because the sequester target the growth of government programs: they will grow at a slower pace as a result of the spending reductions. This is simply how federal budgeting works. The sequester will reduce spending as percentage of the economy, lowering discretionary spending to historic lows.

4. These are very modest cuts. The reductions may not mean much for wealthy Congressman, but states will lose funding for education, job training, health care, and a plethora of other services, jeopardizing assistance for low-income and middle class families alike and threatening the economic recovery. The cuts will also undermine everything from border security to the screening of containers. Estimates show that the sequester would reduce 2013 gross domestic product (GDP) growth by half a percentage point, and would cost the economy close to one million jobs in the next two years.

5. Democrats have rejected the GOP’s sequester replacement bills. Republicans in the House passed a sequester replacement bill in the last Congress that doesn’t raise any new revenue and includes cuts in domestic programs like food stamps, Medicaid, and the social services block grant (which, among other things, funds Meals on Wheels). The GOP has not introduced a replacement bill in this current Congress and refuses to compromise on the Democrats’ balanced approach of higher revenues and more spending cuts. Budget deals cut over the last year have already reduced a substantial amount of spending and even with the revenue included in the fiscal cliff deal, there have been $2.50 in spending cuts for every $1 in revenue signed into law by Obama.

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