Sequestration

[woodchip]

It seems we have another nation ending crisis looming and by what Obama and the Dems are gnashing their teeth over, it will be the death of this country as we know it. In case you are out of the loop, Sequestration is the name, draconian budget slashing the game. But is it really a trigger for the new economic apocalypse?

First off lets remember why we have sequestration. Back two years ago, we had another crisis (seems this administration has lots of em) where we need the deficit ceiling raised. Out of that came a plan where if congress agreed to raise the deficit, a bi-partisan committee would set up some sort of deficit cutting plan. Failing that, automatic budget cuts (sequestration) would take place. Remember too that back then, Obama was very clear that any attempts to circumvent sequestration would be veto'd by him. Of course back then Obama was needing the deficit ceiling raised so he could spend more money. Fast forward and now and somehow sequestration will mean vast more unemployed and babies dying because parents can't afford food to feed them. What sequestration really means is Obama will have less money to spend and suddenly he realizes what he was so very much in favor of back in 2011, now will be a black eye against him.

But is it really such a hindrance on our national well being? First it will be a 85 billion cut in govt. spending. A little over 2% of the over 3 trillion dollar national budget. so out of the base line budgeting of say 7% yearly budget increase the govt. gives itself, now it can only give itself a 5% increase. Tell me something, how many of you are getting a yearly 5% pay increase, let alone a 7% yearly pay increase? Yet somehow the govt. will come to and end and the cries of hungry babies will fill your neighborhood if the feds get 2% less increase in their yearly budget. Let me go find a box of Kleenex as a feel a good cry coming on.

[callmeslick]

It seems we have another nation ending crisis looming and by what Obama and the Dems are gnashing their teeth over, it will be the death of this country as we know it. In case you are out of the loop, Sequestration is the name, draconian budget slashing the game. But is it really a trigger for the new economic apocalypse?

I don't think so.

First off lets remember why we have sequestration. Back two years ago, we had another crisis (seems this administration has lots of em) where we need the deficit ceiling raised. Out of that came a plan where if congress agreed to raise the deficit, a bi-partisan committee would set up some sort of deficit cutting plan. Failing that, automatic budget cuts (sequestration) would take place. Remember too that back then, Obama was very clear that any attempts to circumvent sequestration would be veto'd by him. Of course back then Obama was needing the deficit ceiling raised so he could spend more money. Fast forward and now and somehow sequestration will mean vast more unemployed and babies dying because parents can't afford food to feed them. What sequestration really means is Obama will have less money to spend and suddenly he realizes what he was so very much in favor of back in 2011, now will be a black eye against him.

actually, the fear isn't 'less money to spend', it's that the cuts are across-the-board, and not targetted. Slashing during a recovery without a LOT of planning and thought as to WHERE to slash is really bad for an economy, historically. Therein lies the issue....I'd agree that the dangers have been oversold, but that is, sadly, the only way to reach the voting public to get them to pressure Congress.

But is it really such a hindrance on our national well being? First it will be a 85 billion cut in govt. spending. A little over 2% of the over 3 trillion dollar national budget. so out of the base line budgeting of say 7% yearly budget increase the govt. gives itself, now it can only give itself a 5% increase. Tell me something, how many of you are getting a yearly 5% pay increase, let alone a 7% yearly pay increase? Yet somehow the govt. will come to and end and the cries of hungry babies will fill your neighborhood if the feds get 2% less increase in their yearly budget. Let me go find a box of Kleenex as a feel a good cry coming on.

like I said, way oversold, but still some issues for anyone concerned about continuing the trend of recovery. If you follow the investment markets, they seem keenly aware of potential harm.

[Will Robinson]

I think sequestration should be an amendmendment to the Constitution!
You can replace the across the board cuts with targeted cuts of equal amount but every year we run a deficit we have cuts
And spending increases should be tied to an index like GDP growth.

When things are going good you can spend more...things go bad you decrease spending.

Tax revenue will always be as much as they can raise taxes without getting voted out so you don't need anything automatic there....it's already automatically as much as they dare.

[callmeslick]

I take(not surprisingly) a different view, Will, and one that keeps to old-school Republican principles: Figure out the budget, make the taxation equal to the budgeted amount plus a small provision for surplus(rainy day fund thinking) and maintain that from year to year. The problem around making any government spending/revenue plan MANDATORY is this: unforseen geopolitical and economic situations wreak havoc on a nation whose government is hamstrung by strict limitations on either spending or taxation. Time and time again, we've seen situations arise that dictate short term expenditure, or necessitate short term manipulation of taxation, and if that capability isn't there, the nation could face a world of trouble.

[Will Robinson]

I take(not surprisingly) a different view, Will, and one that keeps to old-school Republican principles: Figure out the budget, make the taxation equal to the budgeted amount plus a small provision for surplus(rainy day fund thinking) and maintain that from year to year. The problem around making any government spending/revenue plan MANDATORY is this: unforseen geopolitical and economic situations wreak havoc on a nation whose government is hamstrung by strict limitations on either spending or taxation. Time and time again, we've seen situations arise that dictate short term expenditure, or necessitate short term manipulation of taxation, and if that capability isn't there, the nation could face a world of trouble.

Using my method you only have mandatory cuts in deficit years and you can still borrow for emergencies so really all I'm doing is keeping them from borrowing indefinitely leaving the ever increasing problem to be 'owned' by those still in office when the current office holder finally retires.

Budget you say? What is that?

[callmeslick]

but, Will, the deficit years are frequently(even in a well-run economy, which ours hasn't been for a decade or more)the times when you most wouldn't want mandatory cuts, for fear that such will push the economy further down. I see your goal, but I don't think your plan would get you there as neatly as you design it to.

[woodchip]

So slick, you don't have a problem with base line budgeting? Why does there have to be a mandatory 7-8% budget increase every year if the revenue side does not afford it?

[Spidey]

Make a budget then tax accordingly, yup that is exactly where the problem is.

You don’t make a budget…then tax accordingly, you tax appropriately (ethically) then budget accordingly.

It’s all bass ackwards.

[Foil]

I was wondering when this might come up. I've been hearing about it for a while; the company I work for (aerospace / satellite comms) is preparing for it, as many of our customers are government-funded projects. But with that said, it's been in the works for a while now, and I gather that most of agencies/companies have plans in place to handle the funding loss without it becoming devastating.

It'll cost jobs of course, but the "economy-pocalypse" stuff is overblown.

[callmeslick]

So slick, you don't have a problem with base line budgeting? Why does there have to be a mandatory 7-8% budget increase every year if the revenue side does not afford it?

I don't have a problem if the attempt is made to balance revenue and outlay. The problems we seem to get into is that a huge majority of folks want both benefits and special tax breaks at the same time, and the numbers don't add up. If we are going to conclude, as a nation, that a robust social safety net, massive defense structure and long term research, education and infrastructure support are good things(and I think they are), then we have to develop a revenue plan that covers everything. Thus, if 7% budget increases are mandatory, so would tax hikes of similar magnitude.

[callmeslick]

Make a budget then tax accordingly, yup that is exactly where the problem is.

You don’t make a budget…then tax accordingly, you tax appropriately (ethically) then budget accordingly.

It’s all bass ackwards.

that way IS bass ackwards, and has been exactly how we got into this mess. We set a tax code, budget unrealistically, then spend on the credit card when the unrealistic budget blows up, predictably.

[Flatlander]

Some perhaps unanticipated consequences of sequestration.

ACC continues planning for sequestration impacts

ACC units are currently executing the wing flying-hour program to maintain combat readiness, and will adjust as sequestration-driven specifics are available. Depending on the outcome of budget decisions, ACC may have to reduce flying operations for two-thirds of squadrons across the command by mid to late May. This includes fighters, non-nuclear bombers, command-and-control, personnel recovery, and intelligence, surveillance and reconnaissance missions.

Langley Cancels Air Show

The 2013 Air Power Over Hampton Roads Open House and Air Show, scheduled for May 3-5, has been cancelled. Driven by the dual threat of operating under a continuing resolution and a potential sequestration, U.S. Air Force leadership at all levels are proactively implementing near-term actions to minimize impact to readiness and our people while protecting wartime operations.

Dover air base starts belt-tightening ahead of cuts


Wings Over Wayne Air Show cancelled

"Our decision to cease planning for the 2013 air show comes after careful review and consideration of the fiscal challenges the Air Force, the Department of Defense and our nation face," said Col. Jeannie Leavitt, 4th Fighter Wing commander. "We're taking prudent measures and doing our best to mitigate our budget risks and align available resources with current and emerging operational requirements. Remaining as mission-ready as possible and preserving our combat capability is our imperative and we're prioritizing spending to ensure this priority is met."

Military spending cuts could cancel some Blue Angels' air shows

Lawmakers talk about delayed deployment of USS Harry S. Truman, defense cuts

Red Flag, Thunderbirds at Nellis targeted for grounding

With "fiscal cliff" budget cuts looming a few weeks away, Air Force leaders said Thursday they probably will cancel upcoming Red Flag air combat training exercises at Nellis Air Force Base and ground the Thunderbirds demonstration team if Congress and the White House don't agree on a solution to the nation's $16 trillion debt.

Navy: Lincoln Refueling Delayed, Will Hurt Carrier Readiness

The U.S. Navy will delay the refueling of the aircraft carrier USS Abraham Lincoln (CVN-72) for an unknown period because of the uncertain fiscal environment due to the ongoing legislative struggle, the service told Congress in a Friday message obtained by USNI News.

Navy update on budget: Slightly different, still bad


This was posted on Facebook by one of the airshow performers I follow:

UPDATE ON SEQUESTRATION FROM ICAS.

GROWING CONSENSUS THAT SEQUESTRATION CUTS WILL BE IMPLEMENTED ON MARCH 1

Despite dire warnings from virtually the entire senior leadership of the U.S. military, there is a growing consensus among congressional leaders that legislatively mandated budget cuts will not be averted, forcing the Pentagon to make draconian budget cuts beginning March 1. This article reports that making $46 billion in cuts during a seven-month period will result in 800,000 civilian defense employees being furloughed without pay for 22 days, cancellation of scheduled maintenance to 25 ships and 450 aircraft, and other emergency-type steps that would have been inconceivable just a few weeks ago.

In a speech on Monday, Senator Mark Warner of Virginia observed that sequestration cuts are a series of spending reductions deliberately designed to be so blatantly damaging that no rational person would allow them to happen. And yet, most politicians believe that the cuts will be made. On Tuesday, Missouri Senator Roy Blunt said, “I think sequester’s gonna happen.” Senator Tom Coburn of Oklahoma said, “We’re gonna have a sequestration. We’re gonna have some pain because the politicians on the Hill aren’t going to make cogent, smart decisions about alternatives to this until they start feeling some pain. It’s a stupid way to govern, but that’s the way we’re doing it right now.”

The sequestration portion of the 2011 Budget Control Act mandates $500 billion in across-the-board defense spending cuts during the next ten years. The current consensus opinion in Washington is that the sequestration deadline of February 28 will pass, forcing the Department of Defense and other federal agencies to make sweeping, across-the-board spending cuts beginning on March 1. According to that same line of thought, those spending cuts will remain in place as Congress and the country begin to feel the pain, eventually resulting in some sort of compromise that allows the military and other government agencies to “undo” or roll back the expense-cutting steps. Under this scenario, it’s unclear how long it will take to reach a level of pain that forces Congress to compromise.

IMPACT OF SEQUESTRATION ON AIR SHOW COMMUNITY

As reported in the last issue of Fast Facts, contingency planning by the U.S. Navy, Air Force, Army and Marine Corps calls for a complete end to all non-essential flying – including air show performances – if sequestration cuts are implemented. ICAS has learned that, if the March 1 deadline is not averted, the Blue Angels, Thunderbirds and single-ship tactical demonstration teams will continue to prepare for the 2013 air show season through March 31. If the situation has not been corrected by then, all preparation will cease and the teams will stop flying on April 1. In addition to an abrupt end to air show performances, the military will also stop supporting air shows with static display aircraft. Although specific details about air shows and open houses held on military bases have not been shared, it is likely that these events will also be cancelled.

And this was posted on the MacDill AFB AirFest Facebook page:

AirFest Fans! We know there has been a lot of doom and gloom in the news lately related to sequestration and your 2013 MacDill AirFest so we wanted to provide a quick update. Your AirFest team is continuing to make preparations to hold your Airfest in April. As of right now, we haven’t cancelled or receive cancellations from any of our scheduled performers. However, we anticipate direction to cancel AirFest 2013 if the Department of Defense is directed to implement the sequestration requirements on 1 March. Obviously, this is not the preferred course of action but necessary nonetheless.

[Tunnelcat]

If we're all going to have to tighten our belts to cut that evil government spending, mostly at the behest of Republicans (tea partiers) who want to pare down that Big Government they seem to loathe when Democrats are running things, then everyone has to feel the pain, even the military.

[snoopy]

I gotta say...

As much as I like air shows, if they are the worst that's going to get cut (they aren't but hey) I won't exactly be upset.

[callmeslick]

I gotta say...

As much as I like air shows, if they are the worst that's going to get cut (they aren't but hey) I won't exactly be upset.

Snoopy echoes my thoughts when reading the above......cutting air shows isn't exactly making me sleep less securely.

[Spidey]

I think people are deliberately trying to make these and most other budget cuts as painful as possible, in an attempt to play on peoples sympathies.

Any budget cuts should be done in the most painless way possible…example:

You have 10 people on the payroll, and you need to cut the budget 10%, you have the option of letting one person go, and therefore feeling all of the pain…or you can cut each employee's pay by 10%.

So you see what I’m getting at here…

[callmeslick]

I think people are deliberately trying to make these and most other budget cuts as painful as possible, in an attempt to play on peoples sympathies.

sometimes, yes, sometimes not.....

Any budget cuts should be done in the most painless way possible…example:

You have 10 people on the payroll, and you need to cut the budget 10%, you have the option of letting one person go, and therefore feeling all of the pain…or you can cut each employee's pay by 10%.

So you see what I’m getting at here…

a lot of complications with a Federal budget, but I agree with the principle.

[Flatlander]

My post wasn't just about air shows (although they will certainly be affected, and will have a ripple effect to civilian performers/vendors/tourism/etc.), but also about drastic military cutbacks that will impact combat readiness / effectiveness.

[Will Robinson]

I think people are deliberately trying to make these and most other budget cuts as painful as possible, in an attempt to play on peoples sympathies.

Any budget cuts should be done in the most painless way possible…example:

You have 10 people on the payroll, and you need to cut the budget 10%, you have the option of letting one person go, and therefore feeling all of the pain…or you can cut each employee's pay by 10%.

So you see what I’m getting at here…

Wasn't there a proposal by an evil republican months ago where they proposed cutting a penny from every proposed dollar in every budget in government. It would supposedly balance the budget in five years and put the spending at the same ratio relative to GDP that it was in the Clinton years.

Of course agreeing to that kind of common sense plan would ruin the 'evil-republicans-want-to-starve-your-children' plan so it's a no go.
Too bad.

And too bad there isn't a powerful voice in america that could speak out to everyone, one that was made up of intelligent, objective watchdog kind of people who could expose the self serving political games that keep simple, effective, solutions from coming to be in congress. That's what we need....some kind of 'free from government-control, publishing/broadcasting/communicating kind of thingy'!

[callmeslick]

My post wasn't just about air shows (although they will certainly be affected, and will have a ripple effect to civilian performers/vendors/tourism/etc.), but also about drastic military cutbacks that will impact combat readiness / effectiveness.

but your post, and some of the links specifically was about airshows not reflecting the overall combat readiness.

[woodchip]

I'm just wondering how many here know how budgets work especially at the end of the budget year?

[woodchip]

Thus, if 7% budget increases are mandatory, so would tax hikes of similar magnitude.

Well to do that you would need a 7% increase in yearly payroll for the working class. Since that will not happen, and the govt keeps jacking up peoples withholding taxes to offset the 7% budget increase, your scenario is one of crushing the working class into oblivion. The govt. has seen the possible result of this so they do not tax at a 7% rate and thus this is why we are 16 trillion in debt. Now tell me again why the govt needs a 7% yearly budget increase when no one else, either workers or corporation, get that kind of increase? And the only reason there is a massive safety net is the govt has shown a fair amount of indigent/lazy people it is easier to live off of govt. handouts than it is to work.

Already with the elimination of the bush era tax breaks, businesses like Walmart and Burger King (just too name a couple) have seen a sharp drop off in business. Walmart is saying February was the worst month in a long long time. While I know the libs don't want to admit it, tax breaks do stimulate the economy as evidenced by what we are seeing now. Corporation will be paying less taxes as they are making less profit. Being a fair sort I will look to see if this is a short term phenomenon or if it has more long term repercussions.

[Tunnelcat]

Hope you guys won't miss your grilled steaks and chicken sandwiches if Congress keeps sitting on it's heals.

http://www.forbes.com/sites/eco-nomics/ ... vironment/

Buuuuuuuuuut, I guess these companies could just keep selling you meat without those pesky government inspections (not that they do a decent job of inspecting meat anyway), like in Europe.

http://vitals.nbcnews.com/_news/2013/02 ... -rare?lite

http://www.cnn.com/2013/02/23/world/eur ... index.html

[Will Robinson]

You know I'm really starting to miss having journalists in this country!
For example, if the reduction in spending caused by Sequestration is only a tiny fraction of the total spending, then how is it so much of our government is going to suddenly shut down?!?
It seems to me someone has run away with the majority of the money we sent them if losing a tiny percentage of that total is going to shut down such a large portion of the operations!

Why isn't this in the news!

[Tunnelcat]

Maybe sequestration is going to cut deeper than you think. It was supposed to be an idea soooo painful that the President and Congress would never want to do it. But no one is blinking or calling "chicken" and it looks like it's going to cut to the bone if it happens. Cuts to ALL the government agencies are in order. Nothing is spared.

In fact, Congress can't even get the mundane stuff done. They're just NOW, on the 25th of Feb., releasing the printed 1040 instruction booklets and forms for mailing out to the taxpayers. Kinda late ain't it? And there's no release date at all for the 1040 ES Estimated Tax forms, evens on the IRS website.

[Will Robinson]

Maybe sequestration is going to cut deeper than you think. It was supposed to be an idea soooo painful that the President and Congress would never want to do it. But no one is blinking or calling "chicken" and it looks like it's going to cut to the bone if it happens. Cuts to ALL the government agencies are in order. Nothing is spared.

In fact, Congress can't even get the mundane stuff done. They're just NOW, on the 25th of Feb., releasing the printed 1040 instruction booklets and forms for mailing out to the taxpayers. Kinda late ain't it? And there's no release date at all for the 1040 ES Estimated Tax forms, evens on the IRS website.

If I was their boss I'd fire them...in fact, I've been trying to get you to help me with that so quit yer bitchin and deal with your failure to do the right thing!

[callmeslick]

my dad and I were noticing the bit about the estimate forms......

[woodchip]

Seems Obama is now trying to minimize his doom and gloom predictions. Guess he's afraid that people are going to find out life will go on with a minimum to no change in their lives. I guess Obama thought his usual tactics of create a crisis to get his way would work once again. Now he's backed himself into a corner. Perhaps one day he will learn he will actually be effective if he learns how to lead and negotiate instead of being a community organizer.

[Ferno]

really minor in the grand scheme of things...

[CUDA]

really minor in the grand scheme of things...

Totally. Only $2 for every $100. And it's not a cut. It's just less of a spending increase. It's a ruse by the White House

[Spidey]

So the congress’s idea of a nuclear deterrent was supposed to be so horrible that it would never be used, turns out to be “no big deal”.

Scary thought, if applied to military thinking.

[callmeslick]

So the congress’s idea of a nuclear deterrent was supposed to be so horrible that it would never be used, turns out to be “no big deal”.

Scary thought, if applied to military thinking.

it isn't 'no big deal' in reality, as will be seen, and the last sentence of yours I agree with......I am all in favor of cutting our bloated, overdone military expenditures, but the lack of certainty or precision in this way of doing so if BAD policy.

[Duper]

This kind of budget cutting never works. Sure there's an end to spending, but never where it really needs to happen.

Measure 13 in Cali and Measure 5 in Oregon are lasting testaments to that.