Sequestration

Effects of Sequester Cuts Were Overstated, but GOP Hawks (and Obama) Want to Cancel It Anyway

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Whitehouse.gov

At the end of February, President Obama practically pleased with Congress to put a stop to budget reductions that were about to take effect as a result of sequestration. " Our top priority as a country right now should be doing everything we can to grow our economy and create good, middle class jobs," he said. "And yet, less than one week from now, Congress is poised to allow a series of arbitrary, automatic budget cuts that will do the exact opposite." The title of the address: Congress must act now to stop the sequester.

Congress didn't act to stop the sequester. The reductions took effect. And what happened? Not much—and certainly not the terrible toll that the sequester's opponents warned of. The federal furloughs that agencies complained about so loudly, for example, have turned out to be far less extensive than predicted. "Most major departments have reduced furlough days, or eliminated them altogether," reports Government Executive: 

The earliest examples came from departments that told Congress they would have to furlough employees, but ended up backtracking. The Education and Justice departments fall into this category. The Agriculture, Transportation and Homeland Security departments all received authority to transfer funds between agency accounts, and were therefore able to cancel planned furloughs. The Commerce Department projected furloughs at its National Oceanic and Atmospheric Administration, only to cancel them in May.

The most significant example of furlough reductions has been the Defense Department. The Pentagon originally planned to furlough all 750,000 of its civilian employees for 22 days. It then used reprogramming to trim that number to 11 days, and more recently — through a series of cost-cutting measures and inter-service transfer of funds—reduced the days of unpaid leave to six. The furloughs are now estimated to affect about 650,000 Defense civilians.

Several agencies have relied on "internal reviews" of their financial conditions, during which they discovered cost-cutting measures had made their situations less dire than originally anticipated. This, in turn, allowed them to cut required furlough days.

The Treasury Department, for example, originally said it would furlough all 90,000 of its Internal Revenue Service employees five days, but has since cut the number of days to three

Meanwhile, the private defense contractors who were so worried about sequestration-related spending reductions, which fell most heavily on the defense budget, seem to be doing just fine, according to a Washington Post report from July:

Big defense contractors are weathering the federal budget sequester far more easily than they projected, in part because they have gradually eliminated jobs over the past few years in anticipation of spending cuts.

Bethesda-based Lockheed Mar­tin, the world's largest defense contractor, reported Tuesday that its profit rose 10 percent, to $859 million, during the second quarter even as revenue dipped slightly. Northrop Grumman and General Dynamics, two other large contractors, are scheduled to report results Wednesday.

…Lockheed Martin had predicted that sequestration would wipe out $825 million in revenue this year, but it no longer expects such a big hit. In fact, the company said, profit will be higher than initially projected.

This helps explain why the predictions of economic troubles that were supposed to arrive following the sequester never quite came true

The reality of sequestration's non-disastrous effects doesn't seem to have set in with the GOP's hawks, however. Sen. John McCain, a vocal opponent of the sequester, has aligned himself with the White House in pushing Senate Republicans to negotiate a budget deal that ends sequestration—largely in hopes of reversing the defense cuts. President Obama, meanwhile, has vowed to continue fighting the sequester too. 

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  1. I think you meant “pleaded” in the first sentence.

    1. I think he meant “whined”

      1. Or he meant Obama offered to “please” Congress if it cancelled the sequester.

    2. There’s a lesson here: never compose a post on an iPhone.

  2. The sequester was Obama’s best idea yet.

    1. He had another?

      1. Alright then, how about “least worst”?

      2. He had another?

        The sequester wasn’t Obama’s idea.

        He did even have that one.

    2. The sequester was Obama’s best idea yet.

      Funny, how his best idea ended in the exact opposite result of what he intended.

  3. I’ve noticed the media immediately dropped the Sequesterpocalypse story when the running red blood of homeless grannies failed to materialize in the streets.

    Too bad, I was hoping people would learn that slight reductions in future spending aren’t the end of the world.

    1. No, it was because the Rethuglicans started pushing non-scandals like the IRS, spying on journalists, and NSA leaks shortly after the sequester.

      1. You’re saying the IRS actions, the spying on journalists, and the NSA spying are “phony scandals” (to quote the talking points)? You’re joking, right? Is that you, Barack?

    2. I still keep hearing that the NRC (Nuclear Regulatory Commission) can’t open the books and re-examine the validity of Yucca Mountain because they don’t have enough funding… Well, than you open it and when funding comes around you can do the studies. Until you can verify that it is a certain danger to anybody, it should be opened. They have been building it for years now, how are they still so far from any conclusions. Fuck I hate the NRC and it’s incredibly strong political motivations.

      1. How about they start building thorium reactors, and then the need for a nuclear dump diminishes greatly.

        /holding breath

        1. You could do it with fast reactors and U-238/Pu-239. Thorium transmutes into U-233 before it fissions anyway – Th-232/U-233 fuel cycle. I think you mean to say the Molten Salt Reactor (MSR). It is the perfect reactor to use Th-232 as its fuel so it usually gets called the “Thorium Reactor”. The MSR is one of my favorite Gen IV reactors, it is too bad that the regulatory climate in the US makes new reactor design and licensing a multi-decade project now.

          However, there is enough U-238 already mined and sitting around to power the United States for centuries, if we built the proper fast reactors. Fast reactors can also run off of the spent fuel from light water reactors (LWR’s). Actually Canada’s CANDU reactors can run off of LWR spent fuel since they tend to be more neutron efficient, but not with nearly the efficiency of the fast reactor.

          1. I should have studied what you did.

          2. When I create my libertarian nation I will be calling on you to plan the power grid. I just need a few billion to buy an island in the Caribbean. Then this ball will really get rolling.

          3. You seem to know a lot about… fission.

            1. It’s all about matching the hatch

      2. There was a federal court order as of yesterday which forces the NRC to make their decision with all haste.

        Pick your source.

  4. Well, we’ve been hounded about inventory reductions. We bought stuff to support the war, but demands have fallen. Now we are told to throw away hundreds of millions of dollars worth of serviceable inventory because some four star wants to be known to have saved the Army millions of dollars. Only thing is we’ll get into another conflict and spend 10 times as much buying it all back, because we’ll try to expedite delivery. But it makes no sense to throw away all this inventory and get back pennies on the dollar of what we spent, when these items are not perishable and perfectly serviceable.

  5. It’s pathetic how the media portray meager cuts to future spending increases in the most negative light possible, while they at least give BCA to tax increases or just outright applaud them.

    Austerity measures are a good example. Cutting spending is “austerity,” which is bad, even when coupled with tax cuts, which never seem to enter the picture. However, Japan’s proposal to increase its consumption tax hasn’t garnered attention from the media in the form of denouncing austerity measures, probably because of Abenomics’ simultaneous loose monetary policy and government spending increases.

    It’s totally unfair coverage.

    1. It’s totally unfair coverage.

      That you expect to see anything other than government cum dribbling out of the mouths of reporters baffles me.

  6. “Our top priority as a country right now should be doing everything we can to grow our economy and create good, middle class jobs,” he said.

    When you hire a new government employee, is that creating a middle class job?

    When he says he wants to “create jobs”, he doesn’t mean the same thing I mean when I “create jobs”.

    Oh, and Barack Obama doesn’t know the first thing about how to make the economy grow. He’s an ignoramus.

    1. Yeah, huh! ’cause government spending equals growth! Private sector just can’t do it!

      /progtard

    2. When you hire a new government employee, is that creating a middle class job?

      When he says he wants to “create jobs”, he doesn’t mean the same thing I mean when I “create jobs”.

      That’s what I was thinking when Montana’s governor, Steve Bullock, argued Medicaid expansion was a benefit for our state because it would “create hundreds of good jobs.”

      Thankfully the legislature gave him the middle finger.

      1. I should move to Montana.

        Unfortunately, I understand Montana has started selling licenses to hunt Californians who are looking to move there, and the hunting season runs through the end of summer.

        1. If you’re the kind of Californian who believes in individual freedom, like you do, you’re more than welcome here. It’s the progressive expats who need to GTFO.

          1. Alright!

          2. Montana should just welcome everyone who wants to come, but only in September. Those who are still around come April are welcome to stay forever.

      2. In addition, there are a lot of private sector jobs that create zero value, but exist due to laws or government.

        Medicare coders at doctor offices / hospitals, tax attorneys / accountants, compliance officers in various fields – all do nothing to create actual value.

        1. Yes, you are totally correct, and I need to remind myself of this.

          That’s likely also true for how large the private health insurance companies are: they’d likely make a lot less money if not for the plethora of government interventions which force/subsidize their scale.

        2. “Compliance officers”

          Is anyone aware of any scientific attempts to estimate the number of man hours used every year just for compliance with federal regulations?

  7. Only the Stupid Party would take what has to be their best victory since the Gingrich years and piss it away.

  8. All those coming disasters enumerated by department heads were never more than idle threats issued on behalf of the administration. We saw the exact same thing from department heads when Reagan trimmed the budget. It’s their desperate attempt to scare people into pressuring congress to give them more money. Most departments saw a 2% or less reduction in their funding. Private businesses cut 2% and more from their budgets when it becomes necessary, without cutting services, and without blinking. Any federal agency head who can’t do the same should be fired in favor of someone who can.

    1. Just goes to show how government agencies don’t have any incentive to manage funds efficiently. Why that doesn’t piss more net-taxpayers off is something I’ll never understand.

  9. The Pentagon originally planned to furlough all 750,000 of its civilian employees for 22 days.

    Or they could have cancelled 10 F35s.

    1. But, but, then the terrorists win!

      /hawktard

    2. Another 343 days would be even better.

  10. “No, fuck you, cut spending.”

  11. The Agriculture, Transportation and Homeland Security departments all received authority to transfer funds between agency accounts, and were therefore able to cancel planned furloughs.
    [. . .]

    The Pentagon originally planned to furlough all 750,000 of its civilian employees for 22 days. It then used reprogramming to trim that number to 11 days, and more recently — through a series of cost-cutting measures and inter-service transfer of funds — reduced the days of unpaid leave to six.

    Having to prioritize your budget dollars so that important things get paid for and superfluous things don’t. Welcome to how the rest of humanity lives, government.

    Personally, I say cut another 10% across the board and do this process all over again. And again and again until spending is about 1/2 of what it currently is.

  12. As long as the sequester doesn’t cut funding for American Apparel ads, I’m cool with it.

  13. Several agencies have relied on “internal reviews” of their financial conditions, during which they discovered cost-cutting measures had made their situations less dire than originally anticipated. This, in turn, allowed them to cut required furlough days.

    Imagine that! Thoughtful belt-tightening and a little financial discipline can keep things going more-or-less as usual without the sky falling! Given the puny cuts represented by the sequester approach in the first place, this result was expected the whole time by savvy observers of the scene. Why can’t this be “the new normal,” and then let’s start the belt-tightening cycle again? We ratcheted our way up to obscene levels of spending and taxation. This experience suggests that we may be able to ratchet down, as well. But if we keep the pace set by sequestration, bringing the size and scope of government down to a decent level will take a long time. There are a lot of drops in the bucket, and sequestration removed only one, despite all the sturm und drang attending it.

  14. Wish he would sequester his mouth. I am tired of the useless speeches!

    http://www.Tactical-Anon.tk

  15. Oh, crap… the sequestration “targets” were chosen for maximum media coverage and political visibility, NOT for “saving money.”

    Gimme a break! Just more O-Bullshit.

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