2:03 PM EST, February 27, 2013
Nothing short of a miracle — or a sudden onset of rational behavior inside the Capital Beltway — is going to prevent mandatory, across-the-board federal spending cuts from going in effect Friday. It's also clear the public sector workforce is going to bear a considerable burden from sequestration through furloughs and related actions.
Estimates vary, but Maryland stands to lose about 12,600 jobs from the sequester cuts, a reflection of our proximity to the nation's capital and the fact that 5.6 percent of jobs in the state are tied to the federal government. But the ripple effect will go much further, as it will also mean $100 million less in federal grants to state and local governments. (See our interactive graphic about sequestration effects in Maryland at baltimoresun.com/sequester)
Cuts to Head Start and the Women, Infants and Children nutrition programs, as well as less money for drug abuse treatment, employment training and vocational rehabilitation for the disabled, will likely have an impact on thousands of working families. That, in turn, will likely mean less spending at the retail level, a rise in unemployment and a reduction in tax receipts. Maryland's smaller airports are slated to lose control tower personnel, and air travelers could face delays.
President Barack Obama has gotten much criticism recently from Republicans who believe he has become a Chicken-Little-in-Chief and over-hyped the impact of sequestration. After all, the $85 billion that is set to be trimmed this week is but a small fraction of overall federal spending — even with just seven months left in the budget year.
But the nature of sequestration — invented as it was in the 2011 debt ceiling standoff as a gun-to-the-head alternative to stalled negotiations over how to reduce the deficit — makes the reductions far worse than they needed to be. Some programs, like Medicare and Medicaid, are untouched despite being major contributors to the deficit, while the Pentagon suffers an oversized blow (but not one based on any long-term military strategy). It is like taking a meat cleaver into surgery and inflicting more damage to the patient than possible good.
One of the fundamental mistakes of the tea party faction that's wielding undue influence in the House of Representatives is to view government spending as automatically suspect. Certainly, reductions in spending along with reasonable increases in tax revenue are needed to reduce the massive federal deficit, but if those reductions are taken too quickly or sharply and plunge the nation into recession, the deficit will grow, not shrink.
That point was made clear Tuesday by Federal Reserve Chairman Ben Bernanke when he urged Congress to postpone sequestration and make cuts more gradually. Efforts to revive the economy through monetary policy will face a "significant headwind" from the mandatory reductions, Mr. Bernanke testified.
So why put the U.S. economy in jeopardy over a measly $85 billion? Perhaps, if one could argue that the reduction would put the nation on a path to a balanced budget, one could conclude that it's better than doing nothing at all. But the sequester is far more likely to be counterproductive by slowing the recovery. Thus, there's really only one explanation for the failure to negotiate a solution to these irrational cuts, and it's a familiar one — partisan politics.
Republicans say they won't budge on taxes, even if it means closing the kind of loopholes that Mitt Romney discussed during the campaign. President Barack Obama and the Democrats aren't interested in rearranging deck chairs on sequester cuts in order to spare high-income earners from sharing in the pain.
The public has heard it all before. The only difference is that if the Friday deadline comes and goes, the discomfort of sequester will no longer be theoretical, particularly for Maryland. Real people will be facing real salary reductions of up to 20 percent. When Gov. Martin O'Malley calls this a "jobs killer," he's absolutely correct. The only question is how bad the damage is going to be.
We don't know if the sequester will necessarily tank the nation's economy, but there's certainly a good chance it will be felt widely. The real kicker is that the harm is wholly unjustified. And the ire of voters is only going to rise in the weeks and months to come as they live with the consequences. It's bull-headed madness and nothing more.
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