Monday, February 25, 2013

Watch for 11th-hour Sequestration talks

...And a whole lot of resistance to the president's 50/50 plan...

During a teleconference Monday, there was a Titanic/sinking ship reference made, comparing the pending sequestration to “rearranging deck chairs.”

Pres. Barack Obama addresses citizens February 15th
at Hyde Park Academy in Chicago, Ill. Photo credit: Leslie Jones McCloud
Senior Administration Officials Principal Deputy Director of the National Economic Council Jason Furman and Deputy Press Secretary for the Economy, Amy Brundage explained during a 40 minute teleconference with reporters how blindly hacking at our national programs and budgets would be bad for America and that sequestration is only a mechanism to force cooperation and compromise.

Technically, sequestration is doing what it is supposed to do. Republicans and Democrats are talking. They are saying no to each other and no to each other within the Democratic Party. They are saying no to the president and his fair compromise plan. If no votes are moved before the end of the workday Friday, sequestration will bring a 13 percent cut to defense spending and a 9 percent cut to non-defense spending.

Sequestration will not apply to Social Security payments or interest on the national debt. It is obvious why some would lead the American public to think there is nothing to the sequestration however why would they? The sequestration is all budget cuts. Why allow any tax hike on the nation’s wealthiest when all that has to happen to balance the budget is nothing. Except, sequestration is not budget balancing nor was it intended to be.
 The sequestration is a punishment or a pull-the-plug situation. It is an automated system that assumes the entire country is brain dead. Why would damaging cuts affect a brain dead nation? Pull the plug. It’s over. 
An $85 billion across-the-board cut which will take place over the next seven months is what few people in this country would like to happen. These same few people are misinformed about how our capitalistic economy works. People who make money during economic downturns may want the sequestration to occur - until a loved one is stuck in an airport somewhere or eats some tainted seafood fresh out of the lake/ocean/river.

It is also in my opinion that these people who oversimplify our complicated economy await the tsunami-like destruction so they can fill their pockets.

During the teleconference, Furman and Brundage were clear how the sequestration will affect Americans.

“The president has a specific plan for a $2.5 trillion reduction in spending to prevent harmful cuts March 1,” Brundage said.

Cuts are in place as a mechanism to force cooperation and compromise but if the cuts do come to pass the funding cuts will be right away. Immediate need funding will be cut - the money that goes to people affected by disaster. Departments would have to figure what exactly to cut. They will be given a goal amount. Cuts will affect national readiness if enacted.

Thus far "the U.S. House of Representatives have not passed anything that deals with sequestration. U.S. Sen. Harry Reid (D-Nevada) has put a plan forward but Republicans can block that action.” Furman said.

“The sequester takes affect Friday and some affects will be felt right away and some on down the road," Furman said. Some people working today will loose their jobs, Brundage said.

 “Long-term unemployment insurance will be cut by 10 percent. The impact on some aspects of Sandy relief will happen right away,” Furman said.

Overall, The sequestration will have a “macroeconomic impact,” the senior officials agreed. Each state has a laundry list of federally assisted programs that would stop or be cut. College kids will have their work study jobs cut.  In Indiana and Illinois, sequestration will cut 4,820 college students off from their work study positions. The college Work Study program is a way federal financial aid is packaged for students in need. It will also have some affect on student loans but the biggest part of the student loan program is protected from sequestration.

 Also on the chopping block in Indiana— if sequestration were to take effect—Hoosiers will lose teachers, Head Start funding for 1,000 children, protections for Clean Air and Clean Water including fish and wildlife protection, military readiness, law enforcement and public safety funds, job search assistance, child care assistance, public health and violence against women funding, vaccine funding and senior nutrition funding in this year alone. In neighboring Illinois, at least 6,000 substance abusers will not receive the help they need.

Overall, sequestration will impact states and the way they budget for public education so instead of investing in education funding will be taken away from America’s students, which is the opposite of Pres. Obama’s plan for America.

 Border security furloughs could create delays for entry and exit into the country. The cuts will affect personnel and when or if departments can procure needed items to function properly so watch for huge delays.

 “The problem is making $85 billion in cuts within seven months. There is no good way to do that,” Furman said. 

 Replacing sequestration with deficit reduction is the president’s plan. Targeted cuts would occur in a smart way instead of blindly across the board. The president’s plan is one plan among suggested plans however his is the only useful plan. In a fair way, the plan Obama puts forth will cut out wasteful programs that do not work while leaving vital funding for programs like Head Start and college work/study unperturbed.

 However, deciding on which plan to follow is at issue. In support of President Obama’s 50/50 approach regarding sequestration, Nevada Senator Harry Reid said recently in a statement that Congress must replace it with a balanced approach to deficit reduction.

 Reid backs the President’s plan of half spending cuts and half tax hikes but a group of liberal Democrats want more revenue to be made through taxation rather than cuts, according to an article in The Hill, because they feel the president‘s plan does not raise enough revenue from tax hikes. They feel most of the revenue in the president’s plan comes from budget cuts. That group of Democrats feels as if the president’s plan should tilt 80 percent tax hikes, 20 percent budget cuts.

Reid is sticking by the president because at least six Democrats running for re-election need to retain their seat in states carried by Mitt Romney, The Hill article continued. So the negotiations continue and it appears that if a plan is carried by the House and Senate, it will need to be 70/30, 75/25 or somewhere near that mix of tax hikes vs. budget cuts since the president‘s fair plan is currently unpopular. It is a lot to consider. In order for the president to push forth on the balance of his plans for improving the middle class and education, it appears he will need Democratic senators to retain their seats.

Meanwhile, the president on Monday asked governors to lobby Congress for votes in favor of his plan. An update informing the Democratic caucus of any new plans is slated for Thursday February 28 (yes, one day before the sequestration all 11th hour, Hail Mary-like and such).

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