For those of you who haven't been paying much attention to the news for the last couple of weeks (you lucky bastards), this Friday is Sequestration Day. Now for those of you who have additionally failed in your obligations to have read the previous posting on this subject in JBS (go ahead, I'll wait here), the Sequestration of 2013 is a series of government spending reductions suggested by the White House, passed in a bi-partisan effort by both Houses of Congress, and mandated to occur by virtue of the 'Budget Control Act of 2011'. If Congress couldn't come to an agreement on some form of budget reform between August of 2011 when it was signed into law and March 1st of 2013 (after a 'kick the can' extension that moved it from January 1, 2013) Sequestration automatically happened.
In typical recent government fashion, the law was passed to trade spending now for savings later; in this case getting a debt ceiling increase of $400 billion back then (with an option for $500 more that was used) for $1.2 trillion in spending reductions over ten years. If an agreement on those reductions wasn't reached, a form of them would kick in automatically instead; and since Congress seldom has the courage to cut money from any program, these cuts would be made based on the difference between the annual portion of the $1.2 trillion and whatever across the board cuts Congress could come up with. (Hell, the Senate hasn't even had the testicular fortitude to pass a budget in four years and the President has been late in delivering budgets four out of the last five years. ) They would affect almost everything except entitlement programs like Medicare, Medicaid, and Social Security.
Hidden in the fine print of all such government language however, is that any such action would be based on the 'Base Line Budget' process that Congress uses where the national checkbook is concerned. Now for those who don't understand this concept of accounting, practices that would be considered illegal if practiced by anyone other than the government; it means that every budget program funded by the government is assumed to get bigger each year. This means that programs will normally see the equivalent of cost of living increases of between 4% and 6%, assuming that their prior year's budget is spent. In this year's case, because the date of Sequestration was moved back to March 1st, the $120 billion of projected reductions that was originally required would now in fact consist ofof a mere $84 billion ... approximately 2.4% of the projected $3.8 trillion 2013 federal budget. (I say projected, because without both Houses passing a budget that's signed into law for the last four years, actual budget numbers get rather fuzzy.) What that in turn means is that the amount of spending that Sequestration will reduce is smaller than the budget increases already built-in under the 'Baseline Budget' principle. In other words, in spite of the process of Sequestration, the government will still spend more this year than it did last year.
All of the Doom and Gloom coming out of the national bully pulpit that we've been hearing about the last week or so about how these cuts will undoubtedly bring about a fiscal Armeggedon in this country are really nothing more than someone from our government telling us that these agencies must 'suffer' with only slightly more than their funding for 2012. Their threats of dire consequences are in fact only being made in order to scare us into paying even more taxes than Congress agreed to just a month ago. So what are we going to do about it?
Well I don't know about you, but I'm going to celebrate Sequestration! Sequestration may be the only government 'reductions' in spending that we are likely to see this year from the bi-partisan efforts the White House and Congressional behavior that has become far more like that of a crack addict than of a responsible national government. It appears that we can no longer count on either major political party to do the right thing, but only instead to produce lies and excuses about their own failures. This is not because they don't know what the right thing is, but because the haven't the backbone to offend any of those special interest groups feeding at the public trough. After all, with today's endless election cycle, if they aren't looking for campaign contributions for a re-election bid, they're looking for at least the vote of benefiting members of a parasitic constituency.
Just this once, it appears that they may have done the right thing (probably by mistake) and they don't know how to dig out of the hole that they've created. While the Sequestration cuts are barely a token, they still represent more than either party has done to change the horrible path that this nation is on in the last couple of decades.
In fact, I recommend that we all go out and celebrate; and that we do so as publicly as possible! Those currently out there on the stump have consistently lied to us not only about the budget, but about the dreaded process of Sequestration that they themselves visited upon us; and for no better reason than to keep us frightened and as they see it, easier to control. Countering their fear mongering with enthusiasm for what they've tried to make a see as disaster might put them back on their heels. Celebrating what they think we should be terrified of could make us seem less predictable in their minds. Acting in a way that passes their understanding might shake recent assumptions by those in Washington that their skills in steering the herd that they believe us to be are anything but complete. If nothing else, we may get a chance to enjoy their temporary discomfiture and give them pause before trying to create their next faux panic in yet another attempt to manipulate us in the next budget debate.
Yes, I know that it's possible that there might actually be negative consequences to Sequestration; though I suspect that if there are, they will be at our leaders' purposeful doing. Even if some hard lessons come out of these manipulations however, we should take it as our just deserts for allowing the bi-partisan fiscal impropriety that's been committed. Times are tough out there financially, and and it's far past time that everyone (including our fearless leaders in Washington) recognized that it's time to learn to do with less in order to survive.
So while it might be a couple of days early in doing so, I would like to wish each and every one of you: