March 20, 2013The word sequestration has been thrown around a lot lately. While many people understand that a congressional sequestration isn't necessarily a good thing, they don't actually understand why it can be a bad thing.
Sequestration allows for the executive branch of the federal government to make small spending cuts across all programs within the congressional budget.
After making those cuts, the federal government uses the saved money to pay down the debt; thus, sequestration, as the government is sequestering (setting aside) money for the purpose of paying off the national debt, which stands at $16 trillion.
Because the government has to cut from the entire budget and not individual programs, almost every area is touched. And while that might seem fair, it also means that programs that may not be able to afford the cuts will also be touched. Defense, federal parks, education, health care, unemployment, they'll all be subject to budget cuts.
House Speaker John Boehner, R-Ohio, has been at odds with the Democratic president and was quoted last week saying, "I don't like the sequester. I think it's taking a meat ax to our government, a meat ax to many programs that will weaken our national defense."
But, in the same breath, he added that "Americans do not support sacrificing real spending cuts for more tax hikes."
It is an impasse between the parties that is beginning to hit close to home for many Americans, including those in Crawford and the surrounding counties.
Jackie James, operations manager for WorkOne Region 10, which includes Harrison, Crawford and Floyd counties, said that her office is doing its best to prepare for the worst.
"Everything is not finalized from the Department of Labor," she said. "We do anticipate reductions in the local counties, but we don't yet know the extent of the reductions because they (Department of Labor) haven't given us the finalized numbers yet."
James and those at WorkOne offices across the country have been working to get people back on their feet and into meaningful employment and/or educational programs.
"It's harder for youth, especially disadvantaged youth," she said. "They need to learn what is out there and what their options are. We try to help them know what areas are seeing the most growth and hiring."
It is a task only made more difficult by the pending budget pulls, and it doesn't look to be resolved in the near future.
At this juncture each party is blaming the other. Democrats blame Republicans for rejecting a mix of tax increases and domestic cuts aimed to ease the burden on the working poor, and Republicans refuse to consider raising taxes on wealthier Americans and blame Democrats for refusing to consider shifting the cuts to mandatory programs such as Medicaid and welfare.
What both parties did agree on was the Budget Control Act of 2011, which enforced discretionary spending limits that would lead to sequester if exceeded. It is the stop-gap measure put into place to stem the flow of government spending during an economic decline and enforces the Balanced Budget and Emergency Deficit Control Act of 1985.
Many people want to know how much the sequestration will help with paying down the national debt. Over 10 years, the debt could be reduced by $1.2 trillion dollars.
President Barack Obama signed into effect an $85 billion cut on the March 1 deadline that he considered unnecessary but unavoidable due to the differing opinions of congressional members.
Obama earlier this month said: "Let's be clear: None of this is necessary. … It's happening because of a choice that Republicans in Congress have made. We shouldn't be making a series of dumb, arbitrary cuts to things."
Some people are already feeling the effects.
Federally extended unemployment checks will be reduced for Indiana residents by 10.7 percent beginning on March 30, and if the state cannot implement changes by that date, the amount of the reduction will continue to increase as time passes. Also, by April 6, the Department of Defense will begin the lay-off process of its civilian workforce.
Other agencies will be furloughing employees, including food inspectors and air traffic controllers, beginning in April, tentatively until Sept. 30. More than $500 billion will be cut from the Defense Department and other national security agencies.
James said the reductions are an inevitability that the local WorkOne office has been attempting to plan for since last year.
"We have planned for the cuts," she said. "But, we don't know the exact numbers or the exact timeline which makes extensive planning difficult, but we did plan for this."
Sequester information to know
•A hit to the economy. Many economists estimate that the sequester will reduce economic growth by up to 0.75 percent this year.
•Softening the blow. The sequester could be amended or softened if Congress can agree to extended deadlines or allowing departmental discretionary spending. A standalone bill as part of next year's budget process isn't out of the realm of possibility.
•Not a long-term solution. While Congress is hoping to put a dent in the deficit by utilizing broad cuts across the board, the sequester doesn't address the long-term reasons behind the $16 trillion debt.