WASHINGTON—Cuts to federal agencies as a result of sequestration, the automatic budget cuts destined to take place next January, will manifest in unpredictable and sometimes devastating ways said analysts.
“The thing that is disconcerting about all of this, is the opportunity for unpleasant surprises is enormous,” said Scott Lilly, Senior Fellow at the Center for American Progress (CAP). “There are going to be things that … most people had never heard of, didn’t know about, and suddenly found out their life is pretty reliant on that little activity that can no longer function very well.”
While much attention has been focused on the $600 billion cuts to defense over the next 10 years, little attention has been given to nondefense spending, the other half of the cuts that make up the overall $1.2 trillion reduction in federal spending as a result of sequestration.
Those cuts will manifest across federal agencies in broad and unexpected ways.
“Nondefense involves literally several thousands of programs, projects, and activities, which are the terms sequestration relies on,” said Lilly, also a former staff director of the House Appropriations Committee.
Lilly has produced a number of research papers on how sequestration will impact federal agencies. He found that those agencies high on personnel will be forced to retire staff and accordingly, impact the public most. Cuts to the Federal Aviation Administration, for example, will likely force a rationing of air traffic controllers, and without them, a number of regional airports will be unable to operate.
Sequestration Current Law
Sequestration was passed into law last year under the Budget Control Act, a result of Congress’s failure to reach an agreement on how to reduce the U.S. budget deficit.
The concept was considered so horrific in application, with cuts to defense the major concern for Republicans and cuts to social programs for Democrats, that it would force members of Congress to resolve their differences.
To date that has not happened. Unless Congress reaches a resolution and repeals the law, cuts of around $60 billion a year will begin on Jan. 1, affecting a range of areas including education, job training, worker safety, medical research, child care, food safety, national parks, visa applications, border security, and safe air travel.
“[Sequestration] would also have destructive impacts on the whole array of federal activities that promote and protect the middle class in this country,” writes Sen. Tom Harkin (D-Iowa) in the preface of a report on sequestration.
The report, available on Harkin’s website, details state-by-state analysis of the effects of sequestration across a range of education, health, and labor programs.
Around 46,000 employees could lose their jobs across three education programs alone, the report says.
“These essential government services directly touch every family,” Harkin writes.
While it is estimated that federal agencies will need to cut budgets by around 9 percent, analysts are predicting an initial higher percentage as the cuts pertain to the fiscal year 2012–2013, which would have already started.
That could force budget cuts up to 12 percent across the board, says Lilly.
The Congressional Budget Office has said that such massive cuts are unsustainable, and last month, the office warned of a recession should sequestration be enacted.
Over to Congress
Sequestration, however, does not have to happen. Congress could agree to repeal the law and negotiate less devastating measures, at least until more detailed reforms on taxation and entitlements are put in place.
But analysts are not hopeful.
“I don’t see any appetite on either side,” said Lilly, noting that it is likely the debate will be linked to an extension of the Bush tax cuts. President Obama would like to see the tax cuts remain for only those with incomes under $250,000. Republicans want the tax cuts to remain in total.
“I don’t see that getting resolved, so I don’t see a way of getting sequestration resolved,” Lilly said.
The Bush tax cuts are due to expire Jan. 1 at the same time as sequestration kicks in, the two collectively described as the “the fiscal cliff.”
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