Sequestration will devastate Virginia’s economy
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By Jonathan Morgenstein
On New Year’s Eve, Democrats and Republicans came together to pass the American Taxpayer Relief Act. However, this agreement simply delayed the now-infamous sequestration for three months. If Congress cannot forge an agreement by March, automatic budget cuts of nearly $110billion per year for the next 10years could devastate Virginia’s economy.
Sequestration would hit the Old Dominion hardest because half of the cuts come from defense. Virginians are rightfully proud of our long military history. At Yorktown, our Continental Army secured the final defeat of British forces. Today, more Virginians serve on active duty than those of any other state in the country, except California. We are home to much of the nation’s civilian defense infrastructure. Sequestration’s budget cuts would disproportionately — close to 10 percent of all jobs lost nationwide — impact our commonwealth.
Morgenstein served two tours as a Marine Corps officer in Iraq and as a civilian in the Office of the secretary of defense. He is a fellow with the Truman National Security Project and a nonresident fellow at the Pell Center for International Relations and Public Policy.
February 20, 2013 - 6:19 AM
The role that defense spending has in explosive government growth is undeniable. We spend almost as much on military spending as the rest of the world combined. The fact is the fuction of defense spending is to defend the country, not to be a jobs program. These cuts will hurt employment in Virginia, but growth in defense spending in the past 10 years has been out of hand. The “cops of the world” mentality that is US foreign policy needs to change and defense spending cuts are part of that procces.
I don’t think so. Sequestration is primarily a cut in the growth of the budget, not in the budget itself. Put differently, spending increases by $1.8 trillion without sequestration, and it increases by $1.65 trillion (from 2012 through 2021) with sequestration. Defense spending will actually increase by 16% under sequestration (23% without) over the same time period.
http://mercatus.org/sites/default/files/fed-spending-2012-2021.jpg
This author has a pretty good analysis (the source of the link to the above graph).
http://www.nationalreview.com/corner/321658/fears-over-sequestration-are-overblown-veronique-de-rugy
“…with a few exceptions, after sequestration, the non-war defense spending is still growing. One important factor in weighing the effect of sequestration is that war spending is not capped to meet certain spending levels outlined in the BCA. In other words, Congress can set the level of war spending above and beyond what is needed, if they wanted to do so to offset the impact of the sequester and BCA caps. So while there is uncertainty about the application of the sequester on war spending…it is guaranteed that there are preemptive measures policymakers can take to limit sequestration’s effect, including propping up war spending to make up for losses in non-war accounts.”
Of course, defense spending is a legitimate role of the federal government and America needs a strong military to defend itself. But that doesn’t mean every dollar spent on defense increases our security and that every cut in defense spending leads to a reduction in security.
She does offer the following caveat:
“Sequestration isn’t an ideal way to address our spending problems, because it doesn’t allow an agency to think strategically about what to cut.”
In other words, across-the-board cuts are effective, but a bit blunt. But they are better than no cut at all, and do, in my opinion offer the opportunity for bloated organizations to consolidate and streamline.
The federal government by way of its waste and fraud , has abused the trust of the US taxpayer. Excessive staffing, benefits, programs, overall inefficiency drove us to where we are now…$11 Trillion in new debt over the last 12 years. The gravy train is coming off its tracks. The greed and sense of entitlement from DC and its beltway royalty has been as staggering as it is harmful.
So go ahead and sequester..sequester your backsides off. I’m all for it. If it hurts Va./the nation short term it only proves the illusion that a huge bureaucratic central government can lead to a nation’s prosperity.
And the number one way that most of those “bloated organizations” will “consolidate and streamline” is by laying off or not hiring employees which will only feed the problem we already have with not enough people in the workforce.
This is a situation with no easy answers and no painless fixes. The only real question is whether history will judge that we should have waited for a better economy or whether we were right to realize that wasn’t coming.
4 – yes, an organization that is bloated and inefficient (i.e., wasteful) does have to cut spending. That is true whether in the private or public sector. Why is that a problem?
Besides, like I said (and like the articles I linked point out)…there’s really not a cut in the spending, just a decrease in the increase. I promise you, there will be no net job loss in the federal government.
4 – The only real question is whether history will judge that we should have waited for a better economy or whether we were right to realize that wasn’t coming.
Well, in that case, we have absolutely nothing to lose. And serious cuts in government spending (and no, the sequestration panic does not constitute serious cuts in government spending) would actually improve the economy. But we won’t see that happen, either.
Will you “promise” that “there will be no net job loss” in the state or local government?
Those cuts, whether you support them or not, are not insubstantial and not happening at a good time for the economy.
We “survived” the Great Depression, and yes, we will survive the “sequestration”, but it may well be harder and cause a deeper recession than if Congress just one day decided to do their damn job.
7 – nope, just federal. I would be surprised if there were cuts at the state or local levels, but not stunned.
And for the third time, Sandi, they are not cuts, they are decreases in increases. The defense budge still grows by 16% over the next 9 years, even with sequestration. That’s not a cut.
Just a few months ago our illustrious leader pledged to veto any GOP (House) attempt to block sequestration.
Now he blames the GOP for job losses if not avoided. Wish I could say; “unbelievable”.
So, “decreases in increases” are not cuts? Really?
10…yes really.
Sandi, let’s say I provide you a stipend of, say, $1000 per year. Then I decide I’m going to increase that to $1230 per year, a 23% increase. Then I decide, because I’m $16B in the hole that I’m only going to increase your stipend to $1160 per year, which is a 16% increase. That’s not a cut (it also is a drop in my debt problem bucket, but never mind).
That means you can still buy 16% MORE than you did last year. That’s not a cut. You can employ 16% MORE than you did last year. That’s not a cut.
I’m not sure how much more simply I can illustrate that.
Obama proposed sequestration and signed it into law, it’s his baby!
Unfortunately the only way to force Obama to a reduction in the rate of growth of government is to let sequestration occur.
The rate of government growth will only be reduced by less than 3% if sequestration occurs but the government will still grow, including defense!
There is enough tax revenue coming in monthly that no services need to be cut. But Obama will temporarily make unnecessary government layoffs and cut some services and blame it all on the Republicans. The liberal media will love televising the closing of national parks, etc.
Obama really wants sequestration just so he can blame the GOP and the uninformed will believe him. It’s all about politics and the Dems regaining control of the House.
Do you use that line with any employees 89Hoo? I ain’t buying it. If you were scheduled to get a 23% increase and you budgeted for that, then you start your year and get told your increase will only be 16%, it is a cut. By any real world definition.
Sandi has the Washington speak down pat! Reductions in increases are cuts, spending is investment, illegals are undocumented workers, and legal tax deductions are loopholes!
I cut my spending $200,000 this year by buying a Ford rather than the Ferrari I had budgeted!
13 – Sandi, if I ran my business like Washington runs itself, I would be in jail for fraud. I don’t spend more money than I have, and I don’t make promises I can’t keep.
Any employer that promises a 23 percent raise irrespective of revenue is either lying or doing something illegal.
I think you have the right wing speak “down” pretty well John R, but that has no bearing.
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I am sure such a level head as yours budgeted for that Ferrari due to the income you were either expecting or were promised. I suppose you having to settle for a Ford means that someone cut your income?
translation for #13..”if you were scheduled for a 23% increase and you budgeted for that…” in other words I have it spent before you give it to me.
Now if I don’t get it- that is somebody else’s problem and I’ll squeal like a stuck pig.
Welcome to DC..where entitlement is a way of life.
BUD, my comments do not need to be translated, or put into “other words”. I cannot help it if you all do not like or apparently understand how budgets, organizations and this Sequestration works.
Yeah Sandi..I apparently don’t understand how budgets work yet you support an administration which hasn’t had a budget for going on 4 years and has added $ 6 trillion to the national debt in little more than 4 years….suhweeeeet!
It’s not a matter of what we all like or understand, it’s recognizing the status quo is heading the wrong way and causing change while those like you defend it.
Actually, it is absolutely “a matter of what we all like or understand”, what people are attacking and prescribing are causing way more problems than they have or will ever solve. Not grasping the weight of the economic collapse we suffered and the damage from cutting when we are unable to provide already is not helping anything and it will not fix our problems.
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President Obama is and has repeatedly offered a balanced and equitable solution that does some good while doing some cutting. That is the smart move IMO and I will continue to support it.
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From what I have seen and read, the majority of the nation agrees with me.
20. Huh, from what I have seen and read, the majority of the nation agrees with me. Interesting.
89Hoo, you’re saying if you were promised a 4% raise next year and your employer said, “Sorry, no can do,” you wouldn’t see that as a cut in your pay?
A lot of preceding comments try to sweep the effects of the sequestration under the rug, but the Pentagon is already laying off thousands and thousands of people just in the run-up, before it’s even happened. They’re doing that because when the sequestration actually hits, they won’t have the manpower in HR to lay people off fast enough.
I believe the majority of this nation has repeatedly said they favored a balanced approach of more revenue and more cuts. Do you have evidence to the contrary?
22 – No, I would see it as no raise. If I make $50,000 this year, and $50,000 next year, that’s not a cut. And I certainly would not obligate funds next year based on money I don’t have.
I would also ask my employer how he can be so certain he will be able to raise my salary at all, and be awfully leery about the legitimacy of his revenue.
And the Pentagon is not laying anyone off. They are furloughing some people, which means they will retain their benefits, and that Congress will eventually restore their pay (with back pay) once a budget is worked out.