Sequestration’s automatic, across-the-board cuts that went into effect in March had a significant impact on the economy, jobs, and vital programs this year. They have been a drag on economic growth, consumer spending, and wages. They have impacted a wide swath of Americans, from the elderly to preschoolers to domestic violence victims to scientists to low-income renters to cancer patients to public school students to the unemployed to defense workers to the homeless.
But all of that pain will only get worse if sequestration is still with us next year and beyond:
1. The cuts get bigger: The country still hasn’t felt the full effects of sequestration yet. It’s supposed to cut $109 billion each year, but Congress passed a bill as part of the fiscal cliff at the beginning of the year that reduced it to $85 billion for 2013. That means $24 billion more in cuts will hit programs in 2014. On top of this, thanks to budgetary terminology that means many spending obligations don’t actually get paid until later on, the Congressional Budget Office estimated that spending would only be reduced by $42 billion in fiscal year 2013, with $89 billion coming due in 2014 and even more in future years.
2. Temporary fixes disappear: Congress and the White House have allowed departments some flexibility to provide a buffer from the cuts, typically funding short-term needs and putting off spending on medium- and longer-term ones, but that only works for so long. “In some cases, agencies minimized their sequester cuts using budget gimmicks, but those gimmicks only work once,” the report notes. “In other cases, agencies drained their reserve and investment accounts to sustain urgent needs, but those accounts need to be replenished later.”
3. Some of the impact is felt far into the future: The report describes sequestration cuts as “hollowing out” many important programs, an impact that won’t be felt until later. The report points to cuts in scientific research, public health, the court system, and others that will result in fewer treatments found, less ability to respond to public health emergencies, and much longer backlogs in court cases. Sequestration may even lead to an increase in wasteful government spending given that it cuts the budget for the watchdogs who root it out.
Agencies that haven’t had the option to resort to gimmicks or fixes are also looking at having to make another round of devastating cuts next year. Jobs, growth, and the deficit would all have a much better outlook without the cuts in place.
Congressional lawmakers are currently negotiating over budgetary issues, with some pushing for an end to sequestration. Yet some Republican lawmakers involved in the talks have praised sequestration, and many others in the party have shifted from initially trying to pin the blame on President Obama to instead owning the cuts as a victory.