By Andrew Bemus, Opinions Editor
Twitter: @Andrew_Bemus
All of us remember the Fiscal Cliff. 24-hour news programs exhausted watchers with the non-important goings-on of a Congress under fire. It was the first epic spectacle of human error we got to witness in 2013. Thanks to the carelessness of that same Congress, we now have a new battle to keep us entertained: sequestration.
The history of Sequestration is as ridiculous as the proposal itself. It was initially signed into law as part of the Budget Control Act of 2011 as an incentive to force Congress to pass a budget. (The fact that the threat of non-reelection and suspension of pay isn’t incentive enough defines a fundamental problem with American politics today. That, though, is a discussion for another time). The idea was that Congress would outlaw the sequestration with a well-thought-out plan for debt reduction. That line of thinking unfortunately culminated in the Fiscal Cliff debacle, which is now culminating in the Sequester battle.
The idea behind a sequester is a good one. The Sequester would cut $1.2T from the national debt over the course of about ten years (the first $85M goes into effect March 1). It is my humble argument, however, that the one on the table doesn’t go far enough and was put together in haste. That being said, neither Republicans nor Democrats propose a decent solution.
The current Sequestration cuts the budget pretty much right down the middle. Half of the cuts go to defense, the other half to random domestic spending programs designed to lessen the impact of recession (AKA reelect members of Congress). There is also a $9.9B cut to Medicare. Here’s my beef: Medicare is the only Entitlement cut. Social Security and Medicaid are absent. I understand this was put together simply as an incentive, but how in the world are we to be serious about debt reduction if two of the biggest boons on our budget are not even touched. And on a side note, how is there any hope of ever lessening the debt if such a small cut phased in over a decade sends Congress into such a tizzy? The $323M cut to immigration enforcement is worrisome as well. The future isn’t bright.
Plans to avoid this harrowing situation are even less bright. House Democrats (led by House Budget Committee ranking member Chris Van Hollen) proposed a plan that focuses on more revenue, Democrat style. This includes a tax on incomes over $1M (affectionately referred to as the “Buffett tax”). Senate Dems proposed this in addition to $110B in cuts over ten years. Frankly, this line of thinking should be an embarrassment to Democrats. Taxing job creators while cutting only $110B is literally the opposite of what America needs. Serious reform includes serious cuts, not the “compromise-minded” fraction cut the Dems propose.
Republicans have it a bit better, but not much. They propose an alternate plan to cut food stamps and Obamacare. They’re also kicking defense cuts out of the picture, and that’s what concerns me. Generally speaking, the US’s overextended presence overseas needs to be relooked at. This half-hearted sequester improperly cuts aircraft purchases and military research. Real budget reform requires us to reconsider our involvement in overseas affairs.
As a side note, I would like to point out just how ironic this whole Sequester debacle really is. The point is to find a compromise between two parties so that there might be some level of sustainable debt slicing going on in the near future. We also want to find a way to have a halfway decent economy again. There are innumerable problems with the federal government today, but one of the biggest is uncertainty. It is the free market, not government, that creates real jobs and progress. Now I’m no economist, but I’m fairly certain in my truthfulness when I say that the free market does not like uncertainty. And its uncertainty that defines the whole sequester battle. Instead of giving business a reliable and sustainable path to walk on, the government gives them confusion and futile legislation. For real sustainability, there needs to be reform that lessens government regulation in addition to debt reduction.
There are a number of things that could make the Sequester better. In a perfect world (one which we are far from), there would be a long-term plan to fix (and ultimately eliminate) Medicaid, Medicare and Social Security. Rather than putting up a futile $10B cut to Medicare, there needs to be a series of cuts phased in over a period of time (so as to minimalize the economic impact) that lead dependent Americans on the path to healthcare independence.
The budget talks taking place over the last few months have been looking for quick fixes. Me, I like to look at things from the big picture perspective. After all, it’s my generation that will have to answer to the power-grabbing actions of our current federal government. Hopefully the government will begin to appreciate that (wishful thinking?) and take the necessary steps to put America on a path of sustainable growth and debt reduction.
Further reading:
Simpson-Bowles Commission Plan: http://www.forbes.com/sites/anthonynitti/2013/02/19/days-before-sequester-bowles-and-simpson-offer-a-second-plan-for-fiscal-sustainability/
Budget Committee Democrats Fact Check: http://democrats.budget.house.gov/fact-sheet/fact-sheet-stop-sequester-job-loss-now-act
The Sequester: Everything You Need to Know: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/20/the-sequester-absolutely-everything-you-could-possibly-need-to-know-in-one-faq/