Wednesday November 14, 2012

Andrew Schoerke

With the national election now history, the biggest challenge facing the president and the Congress is sequestration. It is the word describing the action to be taken by Congress to reduce the national debt by increasing tax income and employing automatic, across-the-board spending cuts to the discretionary federal budget.

Sequestration has been labeled The Cliff by conservatives and Wall Street, because if the national economy were viewed as an on-rushing car headed for a cliff, the economy would plunge over it just as a car would if the federal discretionary budget were cut and taxes raised.

Sequestration is the fallout of the Budget Control Act of 2011, which mandates that increased taxes and automatic discretionary spending cuts are to begin in FY 2013 and end in FY 2021, or, simply put, starting Jan. 1. So what’s wrong with raising taxes and cutting the budget if it will reduce the federal deficit? It will cause the military to be hollowed out scream Republicans! It will result in vital social programs being eviscerated echo the Democrats!

Both parties cry out that defense, health care and other priorities are so dependent on federal spending that unacceptable income and job losses will happen when the cuts begin taking effect. Even a cursory look at the FY 2013 federal budget percentages (data source: Wikipedia) reveals which program will take the biggest hit: Military, including Department of Defense, Veterans Affairs, National Intelligence and nuclear weapons, at 50 percent; Health and Human Services at 5.7 percent; Department of Education at 4.7 percent; Department of State at 3.9 percent; Department of Homeland Security at 3.8 percent; Department of Housing and Urban Development at 2.8 percent; Department of Agriculture at 1.8 percent and Department of Justice at 1.6 percent.; NASA at 1.2 percent; Department of Transportation at 1.7 percent; and Department of Labor at .9 percent.

The remaining balance of 21.9 percent is spread out among the departments of Energy, Interior, Commerce, Treasury and NASA, EPA, Army Corps of Engineers, National Science Foundation, Small Business Administration and Corporation for National and Community Service. During the first year, sequestration would cut 11.5 percent from defense spending, although overseas combat operations are exempted, and cut 9.8 percent from non-defense spending. Social Security and Medicare are not included in the sequestration since they are funded separately and are not included in the discretionary budget.

Is it any wonder that congressmen who have defense installations, plants and facilities in their states or congressional districts are panicked about The Cliff. Military contractors have located their operations in so many congressional districts they could almost always rely on their programs getting congressional funding. If President Eisenhower were in the Oval Office today, his admonition would almost certainly be: We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial-congressional (italics mine) complex.

The sequestration cuts in military spending would surely result in a wave of layoffs that would ripple into a loss of local and state tax revenue, reduced local spending and falling stock market prices of defense contractors. Out of work unelected congressmen from districts dependent on military spending would certainly feel the pain.

They need not worry, though. Rumor has it that a bipartisan group of senators are in the process of working on a deficit reduction deal to avoid The Cliff. Even though deficit spending over the past 11 years has created a national debt of $16.159 trillion, my money is on self-serving congressman to keep the defense bucks flowing.

After all, does anyone really think that any red-blooded patriotic congressman is going to risk not getting re-elected if the military spending gravy train dries up?

Andrew Schoerke of Shaftsbury is a member of the Will Miller Chapter, Veterans For Peace.