Well folks, it’s happened. Our government has been sequestered. Or should that be sequestrated? I don’t know, but orthographic differences aside, most experts agree that this is a pretty bad thing.
If you’re out of the loop, this is what’s happened:
Our brilliant and fearless leaders in Washington, D.C. couldn’t reach a compromise on the best way to deal with America’s staggering debt back in July of 2011.
President Obama and Congress demonstrated their aforementioned brilliance by finding the worst possible solution to the problem, which was across-the-board spending cuts applied to military and domestic programs, as well as mandatory spending.
Then Obama signed that solution into law to be enacted on January 1, 2013, in the hope that Congress would think of something better before then. Our leaders knew that to allow the sequestration to occur would really screw everything up, but hey—I did say they were fearless, didn’t I?
On New Year’s Day, Congress reluctantly passed a bill that let Bush-era tax cuts expire on the wealthiest Americans, generating new revenue for the Fed and averting the “fiscal cliff.” It also delayed sequestration until March 1, 2013.
Now our government’s budget for the fiscal year of 2013 faces cuts of $85 billion, with those cuts to continue every year for the next decade, or until a compromise is reached. The goal is to stabilize the national debt, which is at $16.6 trillion, by reducing it by nearly $4 trillion over the next 10 years.
Don’t applaud our government’s efforts at deficit-reduction just yet. Like I said, sequestration is the worst possible solution to the United States’ debt problem. In the coming year alone, it’s estimated to cost our country about 700,000 jobs.
Half of the $85 billion in cuts—$43 billion—comes from reductions in national security operations and military expenditures. While President Obama has promised that the cuts won’t affect members of the military, more than one million federal employees face the possibility of furloughs, or unpaid time off of work.
The other half is unevenly divided between nonmilitary discretionary funding—money for health, education, disaster relief and national park programs—and mandatory spending on Medicare, unemployment benefits and agriculture programs.
We’re shooting ourselves in the foot with sequestration, because while it might reach the debt-reduction goal of $4 trillion over 10 years, it doesn’t even touch Social Security or Medicaid. Entitlement programs like those are the main reason spending is so astronomically high in the first place.
There is also no new revenue in the sequestration. President Obama and the Democrats had hoped that a “grand bargain” on deficit reform would include tax increases, but Republicans in Congress weren’t having it after caving on taxes back in January.
Unfortunately, this bad idea is here to stay. While the cuts that sequestration will dole out will be traumatic to our delicate economy, legislators will probably keep them in effect until the end of this fiscal year, which is September 30.