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l****z
发帖数: 29846 | 1 The Unscary Sequester
Washington is in a fit of collective terror over the "sequester," aka the
impending across-the-board spending cuts. Trying to explain the zero
economic growth at the end of 2012, White House spokesman Jay Carney blamed
Republicans for "talk about letting the sequester kick in as though that
were an acceptable thing." He left out that President Obama proposed the
sequester in 2011.
Then on Tuesday Mr. Obama warned about "the threat of massive automatic cuts
that have already started to affect business decisions." He proposed tax
increases and "smaller" spending cuts to replace the sequester until
Congress and he can agree to another not-so-grand-bargain. It's nice to see
Mr. Obama worry about "business decisions" for a change, but listening to
his cries of "massive" cuts is like watching "Scary Movie" for the 10th time
. You know it's a joke.
The sequester that nobody seems to love would cut an estimated $85 billion
from the budget this fiscal year starting in March. Half of the savings
would come from defense and half from domestic discretionary programs.
Medicare providers would take a 2% cut. This "doomsday mechanism," as some
in the Administration call it, was the fallback when the White House and
Republicans couldn't agree during the 2011 debt-ceiling negotiations.
The White House strategy was to create a fiscal hatchet that would
disproportionately carve up the defense budget to force the GOP to raise
taxes. The Pentagon absorbs half the sequester cuts though it is only about
19% of the budget. This hasn't worked.
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Republicans have rightly concluded after two years of being sucker-punched
that the sequester is the main negotiating leverage they have and may be the
only way to restrain spending. So now Democrats and a gaggle of interest
groups are denouncing Mr. Obama's fiscal brainchild because the programs
they cherish—from job training to education, to the EPA and energy
subsidies, to money for Planned Parenthood—are about to get chopped too.
Fear not. As always in Washington when there is talk of cutting spending,
most of the hysteria is baseless. The nearby table from the House Budget
Committee shows that programs are hardly starved for money. In Mr. Obama's
first two years, while private businesses and households were spending less
and deleveraging, federal domestic discretionary spending soared by 84% with
some agencies doubling and tripling their budgets.
Spending growth has slowed since Republicans took the House in 2011. Still,
from 2008-2013 federal discretionary spending has climbed to $1.062 trillion
from $933 billion—an increase of 13.9%. Domestic programs grew by 16.6%,
much faster than the 11.6% for national security.
Transportation funding alone climbed to $69.5 billion in 2010 with the
stimulus from $10.7 billion in 2008, and in 2013 the budget is still $17.9
billion, or about 67% higher. Education spending more than doubled in Mr.
Obama's first two years and is up 18.6% to $68.1 billion from 2008-2013.
But wait—this doesn't include the recent Hurricane Sandy relief bill. Less
than half of that $59 billion is going to storm victims while the rest is a
spending end-run around the normal appropriations process. Add that money to
the tab, and total discretionary domestic spending is up closer to 30% from
2008-2013. The sequester would claw that back by all of about 5%.
More troublesome are the cuts in defense, but for security not economic
reasons. The sequester cuts the Pentagon budget by 7%. This fits Mr. Obama's
evident plan to raid the military to pay for social programs like ObamaCare.
But at least high priorities such as troop deployments are exempt from the
cuts. And there is waste in the Pentagon: Start with the billions spent on "
green energy" programs at DOD, bases that are no longer needed, and runaway
health-care costs. Mr. Obama could work with Congress to pass those reforms
so as not to cut weapons and muscle, but he has refused.
The most disingenuous White House claim is that the sequester will hurt the
economy. Reality check: The cuts amount to about 0.5% of GDP. The theory
that any and all government spending is "stimulus" has been put to the test
over the last five years, and the result has been the weakest recovery in 75
years and trillion-dollar annual deficits.
The sequester will help the economy by leaving more capital for private
investment. From 1992-2000 Democrat Bill Clinton and (after 1994) a
Republican Congress oversaw budgets that cut federal outlays to 18.2% from
22.1% of GDP. These were years of rapid growth in production and incomes.
The sequester will surely require worker furloughs and cutbacks in certain
nonpriority services. But most of those layoffs will happen in the
Washington, D.C. area, the recession-free region that has boomed during the
Obama era.
***
The bad news for Congressional Democrats and their spending interests is
that the noose only tightens after this year. Mr. Obama's sequester mandates
roughly $1.2 trillion of discretionary cuts over the next decade. But if
Democrats really want to avoid a sequester, they should stop insisting on
higher taxes and start getting serious about modernizing the entitlements
like Medicare and Medicaid that comprise the other 60% of government. If
they won't, then sequester away.
A version of this article appeared February 7, 2013, on page A14 in the U.S.
edition of The Wall Street Journal, with the headline: The Unscary
Sequester. |
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