BUDGET CUTS FEBRUARY 8, 2013
The White House today, at long last, released a fact sheet outlining what sort of cuts we can expect in domestic discretionary spending if the automatic budget cuts (“the sequester”) are permitted to take effect on March 1. What the hell took so long?
Three days ago Politico’s Darren Samuelsohn reported that the White House had instructed three separate cabinet agencies that they weren’t allowed to talk about pending budget cuts unless they cleared their remarks first with the White House budget office. That so infuriated Senate Appropriations chair Barbara Mikulski, D.-Md., that she scheduled a Feb. 14 hearing on the impact of the non-defense cuts (even though an Appropriations subcommittee already held a similar hearing last summer, and released a report on sequestration’s likely impact on non-defense jobs and services). Mikulski also told Politico that the White House was putting its own cabinet agencies under a “gag order.” That seems to have been the prod that the White House needed.
But why did the White House need to be prodded at all? Except for the Pentagon, which has been free to mau-mau Congress all it wants with lurid details about how the sequester would diminish U.S. defense capabilities, the domestic cabinet agencies have lately been silent about sequestration’s looming impact. Apparently the White House was worried that whatever the cabinet agencies said might conflict with calculations made by the Office of Management and Budget, which has issued three reports on sequestration’s likely impact, most recently in August 2012.
Perhaps the White House was concerned that government agencies, when left to their own devices, might exaggerate, for the purposes of self-protection, the harmful effects of proposed budget cuts. My mentor and journalistic guru, Charles Peters, founder of the Washington Monthly, has identified this as the “fireman first principle.” Here’s how he describes the gambit it in his 1980 book, How Washington Really Works:
[W]hen faced with a budget cut, the bureaucrat translates it into bad news for members of Congress who are powerful enough to restore the amount eliminated. In other words, he chops where it will hurt constituents the most, not the least. At the local government level, this is most often done by threatening reductions in fire and police protection…. The bureaucrat will almost always say that a budget cut is sure to result in the loss of jobs. The directly threatened employees will then write their congressman, who will almost certainly vote to restore the funds….
But when Charlie wrote this passage he wasn’t contemplating cuts of the magnitude embodied in the sequester—$1.2 trillion over 10 years, which translates into immediate domestic discretionary cuts of 9 percent. (The defense cuts would be 13 percent.) Nor was he contemplating that these cuts would be made during a recovery as fragile as the one we have today. Cuts in spending by the Pentagon and state and local governments already caused the economy to contract during the last quarter of 2012. “A cut of these dimensions is going to be harmful to the economy,” Charlie told me, and calculating the extent of the sequester’s effects is going to be especially difficult.
If the economy contracts a second time during the present quarter, the U.S. economy will be back in recession. Perhaps naively, when the news about last quarter’s contraction came out I concluded that the Republicans would quickly agree to cancel (or at least postpone) the sequester. They don’t want a recession, do they? Since Obama’s a lame duck, then couldn’t even capitalize on it to deny him another term. But the current Republican strategy appears to be: We don’t care if we cause a recession. We just want to cut the hell out of government spending. Even if it means cutting the hell out of defense spending.
I still don’t believe Republicans will be able to pursue for very long a strategy to cut Pentagon spending by 13 percent in 2013 and 8 percent thereafter. But I’m impressed by how long they’ve held their ground. The Wall Street Journal editorial page talks a good game when it calls this “The Unscary Sequester.” The sequester, it says, “will help the economy by leaving more capital for private investment.” The Journal, at least in this instance, rejects what Paul Krugman calls “weaponized Keynesianism,” i.e., the idea that defense spending, and only defense spending, can stimulate a weakened economy. But even the Journal concedes that the cuts are “troublesome” with respect to national security.
But you want to know what the impact of those domestic cuts will be. Here’s what the White House is now predicting: 70,000 kids dropped from Head Start, up to 2,100 fewer food inspections, up to 373,000 “seriously mentally ill” people untreated, more than a thousand FBI agents let go, about a thousand fewer criminal cases prosecuted (as hundreds of prosecutors are furloughed), a thousand fewer research grants from the National Science Foundation (affecting 12,000 scientists), about 1,200 fewer workplace inspections, four million fewer Meals on Wheels for senior citizens, cuts in emergency unemployment compensation of up to 9.4 percent….
And, oh, one more. Cuts in FEMA grants that help state and local governments employ, yes, firefighters. This time I think it may actually be true.