The Tribune Democrat, Johnstown, PA

July 1, 2013

Jean Friday | Sequestration: The forgotten tragedy

Jean Friday

— Keeping tabs on Congress is a tough job, as our representatives move rapidly from one crisis to the next. Recently, battles have been over competing budget proposals; negotiations over immigration, farm and gun-control bills; and now a looming student loan rate crisis.

However, once an issue is no longer the flavor of the month, it can be quickly forgotten. One such issue is sequestration.

Both the media and the general public seem to have forgotten about sequestration, which just a few months ago was on everyone’s minds. Unfortunately, sequestration is still with us and is still hurting vulnerable Americans, including senior citizens. 

First, we must put sequestration into its proper context.  This was a deficit-reduction program so onerous that it was created to force a deficit deal. The idea was that both sides would move heaven and earth to avoid squestration – an across-the-board cut of every domestic discretionary and defense program.

This is deficit-cutting with a chain saw – where a scalpel would be more appropriate.  

But now many in Congress want to negotiate further deficit reduction using funding levels under sequestration as a starting point!

In May, the House Appropriations Committee voted to fund domestic programs at $17 billion under sequestration levels, while increasing defense spending by $28 billion.

In stark contrast, the Senate Appropriations Committee voted recently to increase budget caps on domestic programs by $91 billion, in a spending plan along the lines of their budget, which calls for a mix of targeted spending reductions and revenue increases to cancel the sequester in a responsible way.

The most likely outcome is that neither chamber will win the support of the other. Therefore, appropriations will be done that match the current sequester guidelines.

Many readers will wonder why it is so important to cancel and replace these cuts. 

There are so many negative impacts that go beyond the longer lines at airports, which made the most headlines. For instance, of particular concern to the Alliance for Retired Americans is the cut to Meals on Wheels programs. Pennsylvania stands to lose almost $3 million for senior nutrition programs.

The list goes on and on, according to a state-by-state report compiled by Iowa Sen. Tom Harkin: 3,305 fewer children in Head Start, 8,235 fewer children vaccinated, 25,926 fewer HIV tests, more than $18 million less for home-heating assistance, 139 fewer schools getting federal grants, and 59,596 fewer people served by programs that help job-seekers.

These numbers are all specific to Pennsylvania, and they are just a sampling of the list. 

Sequestration is a large-scale tragedy.

Like most tragedies, this one is not without its irony. The best-kept secret in politics these days is that the deficit is falling precipitously. 

In 2009, during the worst of the recession, revenue was plummeting, demand for services was skyrocketing and the government engaged in a temporary stimulus program. The result was a budget deficit of almost 12 percent of our gross domestic product. Projections for 2014 peg our budget deficit at a much more manageable 5.3 percent of GDP. 

As the economy recovers, the deficit naturally shrinks due to increased tax revenue and decreased demands for services. Congress and the president also agreed to several rounds of spending cuts and revenue increases throughout 2011 and 2012 totaling $2.5 trillion in deficit reduction over the next 10 years. 

Finally, the No. 1 driver of our spending – health care costs – have been growing at historically low levels under new provisions in the Affordable Care Act that control insurance prices and reward hospitals for efficiency and good care.

To make a long story short, the deficit issue has moved out of crisis mode.

In this new deficit reality, when considering the human impact of sequestration, the only sensible way forward is to repeal it and replace it with spending cuts and revenue increases that are more thoughtful about their economic and human impact. 

Let’s not forget the lesson that Europe’s austerity movement can teach us. Our economy is recovering much faster than that of Europe because their governments enacted even worse spending cuts than ours did. The International Monetary Fund, after studying the effects of rapid spending cuts in most industrialized nations, estimates that sequestration will cost us about 1.5 percent GDP growth this year. 

No one would argue that it should not be our goal to return to the budget surpluses we enjoyed in the 1990s. The Alliance for Retired Americans does not advocate that we simply cancel sequestration and ignore the budget deficit. The best way to conquer the deficit is through growth, which should mean more spending on infrastructure and other priorities that increase jobs. 

Meanwhile, we should look for ways to save more money in health care by allowing Medicare to negotiate prescription drug prices, a reform that could save $200 billion over 10 years.

We should stop spending money on military equipment the Pentagon doesn’t want, rather than allowing Congress members to dictate spending based on what is produced in their districts. 

Even the immigration bill currently being debated in the Senate is estimated to bring in $1 trillion in new revenue as undocumented immigrants begin paying taxes!

With common-sense spending cuts, combined with closing tax loopholes for wealthy individuals and corporations and a continuing economic recovery, we can get our nation back to surpluses and financial strength.

The Alliance for Retired Americans is an advocacy group whose mission is to improve the quality of life for senior citizens through public policy. Jean Friday is president of the Pennsylvania chapter, which has 300,000 members and 149 local affiliates statewide. She is a retired chemist and steelworker from Belle Vernon, Westmoreland County.

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