Politics Straight, No Chaser
Budget cuts announced Friday
Published: Monday, March 4, 2013
Updated: Monday, April 22, 2013 21:04
The other component of the fiscal cliff (budget cuts) was announced last Friday, and it’s no surprise we went over it head first. Two years ago, after coming out of the debt ceiling crisis, the Republicans in Congress fabricated, there was a deal struck called the Budget Control Act of 2011. The act was intended to raise the debt ceiling and create a super committee of 12 senators who would propose legislation with the goal of reducing the deficit by $1.2 trillion over the next 10 years. But as a bipartisan committee with six members from each party, the inevitable happened—nothing.
Now cue the next piece of the Budget Control Act—sequestration. This refers to automatic, equal cuts to military and domestic spending that were supposed to act as an incentive for each side to make a permanent debt deal, seeing as Republicans wouldn’t want to touch their precious defense spending and Democrats wouldn’t want to see anything happen to their prized social programs. The deadline for the cuts was Jan. 1, 2013 so they had a full year to deal with the cuts and try and avoid the crisis. Congress had to pass the American Tax Payer Relief Act in the early hours of Jan. 1 to buy more time, but this was not to be the end of it. They added new revenue, in part by letting the Bush and FICA Tax Cuts expire, but ultimately ended up kicking the sequestration can further down the road to this past Friday.
The first of March came and went with no deal made. The Republicans, including the Speaker of the House John Boehner (R-Ohio), said they refused the revenue increases and will continue to do so because, as they see it, President Barack Obama already got all the revenue he needed in January. Obama and fellow Democrats alike said they could not agree to replace the current cuts with those proposed by Republicans and neither side seems to be willing to budge. Obama expects the cuts to remain in place for weeks or even months meaning while there will be less spent on defense and nondefense programs, overall spending will still increase for 2013—it will just not get as high as originally projected.
The results of the cuts will be tough on our economy, but I do not believe they will cause a double-dip recession. One of the outcomes of these automatic cuts that could worsen the problem is the fact that defense contractors have been laying off large numbers of employees and downsizing for the last few months. The cuts began costing Americans their jobs before they came into effect and without the government handing out as many large contracts to firms like Northrop Grumman, Boeing, Lockheed Martin, Barrett Firearms, etc., they cannot maintain their current workforces and are forced to make layoffs. According the Congressional Budget Office’s report, the results are expected to hurt the economy in the short-term and the Nobel Prize winning economist, Paul Krugman, projects in total the United States will lose approximately 700,000 jobs.
But how exactly did the country get to this point? To Democrats, it seems like the Republicans want to stop government expansion in its tracks. To Republicans, it seems like the Democrats want to expand government even more, having it permeate their everyday lives. Republicans think they are saving the public from the dangers of an overactive and far-reaching federal government, Democrats believe they are just looking to make Americans’ lives easier and more fulfilled. What this leads to is a stalemate—their ideals have created a legislative impasse thanks to the men and women we have elected to Congress who are more concerned with their short-term futures than with the long-term health of the country.
With gerrymandering, or the redrawing of congressional districts, and the danger of primaries due to the Tea Party, we just do not have the moderates in Congress we need in order to reach a compromise. There is also the factor of the no-tax-hikes pledge signed by all but six of the House Republicans from the 112th Congress that got us into this mess. This year there are 219 signees, all Republicans, in the House. Compromise has become too hard to pull off, especially when it comes to budgetary issues in Washington, D.C.
The new and more conservative Republicans are really to blame for this, but the Democrats can take just as much of the blame by thinking the threat of spending cuts would spur conversation and compromise on the federal budget. The Republicans are getting exactly what they want now. Yes, they had to give up revenue increases on Jan. 1., but they ended up winning their cuts as a result. The sequestration threat worked once to get something done, but not this time. Deliberations will get worse before they get better, but they can’t hold the economy hostage forever... right?