Sizing Up The Sequester Cuts

sequesterNow that the unpopular sequester cuts are officially underway and on track to usher in more government austerity over the coming months, government workers  and many American families are left scrambling to face the reality of lower federal government spending levels across American society.

Cecelia Munoz, director of the White House Domestic Policy Council, spoke with Judy Woodruff on Bloomberg’s Conversations with Judy Woodruff about the $85 billion in sequester cuts that began on March 1st.

“At some level we are all going to feel it. When March 1st comes all the federal agencies will have to make adjustments in their budgets to accommodate this $85 billion dollars so it will mean things like furloughs for federal officials who are doing things like meat inspection or TSA officers or border patrol officials or resources that are then flow down to the states that have an impact on education or mental health services for kids or other kinds of services” Munoz said.

Although the full economic impact of the sequester cuts are difficult to quantify at this early stage, most economists agree that removing $85 billion dollars from the American economy in the fiscal year of 2013, or $1.2. trillion through October 2021, will likely result in some negative economic effects across the economy and also change the way that American society operates.

“So the effects will be felt to a greater degree over time where people will start getting notices that they themselves will be furloughed and eventually we will see things like longer lines at the airports or at ports or other points of entry in the United States. We will all feel the effects of this” Munoz told Judy Woodruff.

On NBC’s Meet the Press aired yesterday House Speaker John Boehner (R-Ohio) was questioned by host David Gregory about the impact of the sequester cuts and the Republican refusal to raise more revenues through tax reform in order to achieve a bipartisan compromise.

“Oh the president asked $1.3 trillion worth of increases in revenue. And only put up $850 billion worth of spending cuts. Everybody in Washington knows what the problem is, but nobody wants to address it” Boehner said.

“I’ve watched leaders from both parties kick this can down the road, kick it down the road and they kick it down the road. We’re out of road to kick the can down. We’ve got a long-term spending problem that has to be addressed” he continued.

Later in the interview, Speaker Boehner put the blame for the sequestration cuts squarely on the White House and Senate Democrats.

“The fact is, the president and Senate Democrats have done nothing to pass a plan to avert this and to deal honestly with the spending problem the country has.”

Gene Sperling, director of the White House Economic Council, also spoke on NBC’s Meet the Press yesterday and articulated how that sequestration cuts are already hurting the U.S. economy.

“You know, independent economists from the chairman of the Federal Reserve to the independent Congressional Budget Office have estimated that this sequester is going to cost our economy 750,000 jobs. I talk to CEOs every day who tell me they have job-creating projects on hold because of this sequester and its uncertainty” Sperling said.

“I’ve talked to a major CEO who says he has 20,000 suppliers, small businesses, that will be deeply hurt” he added.

Sperling believes that President Obama’s plan is balanced and holds the key to true budget reform.

“You and I both know that the real answer to eliminating this harmful sequester for the next ten years is exactly the type of balanced agreement that the president has called for, has still kept on the table. And that the speaker, Boehner, was willing to consider just months ago” Sperling said.

Despite facing political gridlock on Capitol Hill over the sequestration, Sperling continues to hold out some hope that Republicans may eventually strike a different chord about the sequester cuts by reaching a bipartisan compromise.

“Our hope, is that as more Republicans start to see this pain in their own districts, that they will choose bipartisan compromise over this absolutist position,” he said.

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