The Coming Budget Battle   Leave a comment

Like walkers from AMC’s The Walking Dead, Friday brings a return to the budgetary antics we’ve grown accustomed to over the past few years: from the fiscal cliff nightmares to the endless debt ceiling debates, its’ like they can’t kill the zombie sonuvabitch that is the federal budget…every time you think it’s down for good, it gets right back up and threatens the country’s financial health all over again…

Like life in a bad Road Runner cartoon, the United States has survived the New Year’s “fiscal cliff,” double rounds of debt-ceiling roulette and various budget blow-ups over the past two years. Now the threat is $85 billion in indiscriminate spending cuts that would hit most federal programs and fall hardest on the military. Pentagon programs are slated for an 8 percent cut; other agencies would lose 5 percent for the current budget year.

By law, these cuts known as the “sequester” begin unfolding automatically at week’s end unless President Barack Obama and Congress act to stop them. Even after they’ve begun, the cuts still could be halted or reversed through legislation.

Why did Congress and Obama agree to automatic cuts they don’t like? To corner themselves into getting the nation’s deficit under control.(MSN Politics)

Ironically, President Obama, most members of Congress and most economists agree on two things:

  • The budget deficit needs to be reduced
  • The sequester, though, is the wrong way to do that

Now, I know what you’re thinking: surely, the cuts can’t be that bad…depends on the perspective. If the cuts are short term, the damage to the country’s economy might not be that bad. On the other hand…

It’s unlikely they will be as bad — or at least as immediate — as some overexcited members of the Obama administration have made out. But the cuts have the potential to be significant if the standoff drags on.

Early on, about 2 million long-term unemployed people could see a $30 cut in benefit checks now averaging $300 a week. Federal subsidies for school construction, clean energy and state and local public works projects could be pinched. Low-income pregnant women and new mothers may find it harder to sign up for food aid.

Much depends on how states and communities manage any shortfalls in aid from Washington.

Furloughs of federal employees are for the most part a month or more away. Then, they might have to take up to a day off per week without pay.

That’s when the public could start seeing delays at airports, disruptions in meat inspection, fewer services at national parks and the like.

An impasse lasting into the fall would reach farther, probably shrinking Head Start slots, for example.

Much of the federal budget is off-limits to the automatic cuts. Among exempted programs: Social Security, Medicaid, food stamps, Pell Grants and veterans’ programs.

Even so, officials warn of a hollowed-out military capability, compromised border security and spreading deterioration of public services if the sequester continues. It’s “like a rolling ball,” said Homeland Security Secretary Janet Napolitano. “It keeps growing.”(MSN Politics)

As stated above earlier, this came to pass as a sort of self-inflicted time bomb…remember the debt ceiling crisis of 2011? Well, part of what got out of that kerfuffle was the sequester: automatic spending cuts that would trigger if a long-term deficit/debt reduction plan wasn’t implemented. Guess what happened? Congress and the President couldn’t come to agreement on that long-term plan, so the sequester was set in motion as a last-ditch, force them to do something approach….which is now staring us all in the face like that last walker you couldn’t get rid of soon enough.

So, what will happen? Assuming no deal is reached, the sequester, about $85 billion in cuts for this year, will begin to take effect. Should a deal be reached soon afterward, the damage shouldn’t be too much. But…by March 27th, the federal government will be out of money as the current legislation which provides spending for Washington expires on that day; if there’s no deal by then…all holy hell will likely break loose in D.C. until there is a long-term solution; let’s hope it doesn’t get to that point, though…for all our sakes.

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Posted February 27, 2013 by Matthew in Uncategorized

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