Last week, an asteroid came precariously close to earth – just 17,000 miles, one-tenth of the distance to the moon. Had it struck, it could have resulted in extinction of life forms, as the asteroid did 65 million years ago, wiping out the dinosaurs.
But just the day before, a meteor did make it through striking Siberia causing hundreds of deaths and injuries – and its reverberations were felt through the countryside.
Sequester would be like that.
Lest you think that sequester would land in Washington D.C. and only crater there, impacting only some federal government bureaucrats, you would be mistaken. The reverberations would be felt in local communities throughout the country. In IRAs and pensions, in spending power for families, weakened consumer demand, declining business profits, weakened consumer and business confidence.
Hundreds of thousands of jobs would be lost, the Gross Domestic Product would lose a point or two, which means we may well fall back into recession after clawing our way back from the Great Recession for the past five years.
Federal aid to states – including Hurricane Sandy recovery funding begrudgingly authorized by Congressional Republicans – would be cut, as well.
It is not just the actual spending that would be impacted. The dysfunction in government would likely result in the major credit rating agencies like Standard & Poor’s downgrading U.S. government credit – as it did after the 2011 debt ceiling crisis another manufactured crisis precipitated by Republicans (now S&P has an added incentive because the federal government is suing over its Triple A-ratings on mortgage securities before the 2008 crash).
But in 2011,even though the Republicans ultimately balked when they realized that you only destroy the full faith and credit of the United States once, S&P cited government dysfunction as the reason for its unprecedented, never-before in history, downgrade of the United States.
Sequester would pretty much require the rating agencies to downgrade U.S. debt again, pushing up the cost of borrowing (which now is at a negative rate, so that if the federal government would actually issue bonds to invest in infrastructure, it would stimulate the economy without adding to debt). But if the Republicans cause the credit rating to fall, any savings the government might have gotten from cutting spending will have to go to paying higher interest rates.
And that goes for all credit interest that us little people pay – on mortgages, car and college loans, credit cards, and on and on it goes.
I’m betting the financial markets will also be rattled – stocks, which have more than returned to pre-2008 crash levels – will fall again, as investors realize companies will see lower profits. That will cut into retirees’ pension and IRA savings, even as the Republicans slash at Social Security and Medicare benefits.
Cuts triggered by sequester would go further than just cuts-across the board throughout government.
The Republicans would use sequester to cut off the spigot to all spending. They have already done this successfully to stop the implementation of programs and laws – Dodd-Frank financial reform and the Consumer Finance Board and Obamacare, as just a couple of examples.
Republicans will use sequester to cut appropriations for the SEC so it is hobbled in any enforcement of its own regulatory oversight of financial markets. No funding for EPA to regulate coal plants or implement.
Any prospect of universal Pre-K, a plan that would ultimately save society the cost of remedial education, teen pregnancy, incarceration and lowered earnings (lowering tax revenues to the state), will also never materialize (indeed, it is estimated that every $1 in pre-K funding returns $7 in societal benefit).
Lest you think that sequester would be the equivalent to zero-based budgeting, and that it would enable the Congress to start over and appropriate money, recognize that all spending bills originate in the House, where the tea party is controlling things and has an ultimate goal of shutting down the federal government altogether.
Unlike the asteroid that could hit earth (another is due in 2029), this crisis which would reverberate around the globe is completely man-made.
“I realize that tax reform and entitlement reform will not be easy,” President Obama said in his State of the Union Address, sounding very reasonable. “The politics will be hard for both sides. None of us will get 100 percent of what we want. But the alternative will cost us jobs, hurt our economy, visit hardship on millions of hardworking Americans. So let’s set party interests aside and work to pass a budget that replaces reckless cuts with smart savings and wise investments in our future. And let’s do it without the brinksmanship that stresses consumers and scares off investors. The greatest nation on Earth cannot keep conducting its business by drifting from one manufactured crisis to the next. We can’t do it.”
Obama noted that though he has already made $2.5 trillion in cuts – more than half the way to the $4 trillion that is targeted to get the national debt under control, in 2011, Congress passed a law saying that if both parties couldn’t agree on a plan to reach our deficit goal, about a trillion dollars’ worth of budget cuts would automatically go into effect this year.
“These sudden, harsh, arbitrary cuts would jeopardize our military readiness,” Obama said (and outgoing Defense Secretary Leon Panetta stated as well.) “They’d devastate priorities like education, and energy, and medical research. They would certainly slow our recovery, and cost us hundreds of thousands of jobs. That’s why Democrats, Republicans, business leaders, and economists have already said that these cuts, known here in Washington as the sequester, are a really bad idea.”
It was universally believed at the time the sequester scheme was hatched that Republicans would never allow it to go forward because of their ideological stance on defense spending. But, after trying to inoculate defense spending from the mandated cuts – have decided that they would rather put the nation through sequester, it now seems that the Republicans don’t have a problem with the mandated cuts to Defense at all.
This is clear because House Speaker Boehner has decided to call a recess and send the House home for 10 days, giving precious little time for any real action before the March 1 deadline. Brinkmanship, anyone?
This, again, has nothing to do with what is good for the country, but Republicans have made a political calculation, and the cuts in defense spending – just like the threat of plunging the country back into recession and triggering double-digit unemployment again – are all part of it.
Republicans are eying the 2014 midterm elections, believing the sequester would happen early enough for American amnesia to set in by Election Day.
Americans would forget who was responsible and instead blame Obama for the heightened misery and suffering of lost wages, lost jobs and the return to the financial insecurity, their future permanently altered by reduced income and savings, even though it was the Republicans who voted for it, and forced it on Obama rather than take Obama’s grand bargain which Speaker John Boehner said delivered 98 percent of what he wanted.
Republicans expect that voters will hold Obama responsible for the drop in credit rating that is sure to accompany sequester, just as they saddle Obama with blame for the 2011 drop in credit rating, the first in America’s long history.
Republicans calculate that instead of a trumped up impeachment (Fast and Furious, Benghazi, Drone strikes have so far missed their mark), sequester will due even better to stop Obama’s second term agenda, making sure that none of his lofty goals – climate change, universal pre-K, rebuilding America’s deteriorating infrastructure – are accomplished, and robbing him of his legacy and America of any progress.
Sequester would do that and the Republicans can go back to their tea party anti-government right-wing extremists and be hailed heroes rather than the villains they are.
It is the perfect crime – Republicans get the spending cuts without having their finger prints on any of it – they have been calling for spending cuts, but have never actually specified any they would make. Indeed, when Obama was able to reduce Medicare spending (not benefits) by $719 billion, they screamed up and down that Obama was cutting Medicare (even though the Ryan budget had the same $719 billion cut, but would have cut benefits, not costs, and Republicans continue to work diligently to destroy Medicare altogether by voucherizing it).
They will be able to blame Obama for the cuts in defense spending – and tie that to his Democratic administration’s failure to protect national security (ships are not being deployed as we speak because of the realization that sequester will happen). They will be able to blame Obama and the Democratic Administration for slashing Head Start, veterans health benefits, school aid, even though their austerity budget would destroy these and the rest of what little Social Safety Net America still provides.
Outbreak of Salmonella poisoning? That too will be Obama’s fault because the number of food inspections will have to be cut beyond the already woefully inadequate levels.
Ponzi schemes breaking out all over? That too will be Obama’s fault, even though it is Congressional Republicans who pull funding for the SEC.
Flight safety and delays? Tough luck, because 10% of the Federal Aviation Administration workforce will be furloughed each day.
So much for Obama’s overarching theme for his second-term agenda: restoring the vibrancy of the middle-class. “A growing economy that creates good, middle-class jobs — that must be the North Star that guides our efforts,” he said.
It is the middle-class who are specifically targeted under Sequester.
Universal Pre-K? Are you kidding? 70,000 children will lose access to Head Start, and 14,000 teachers and workers will be laid off, because of a $424 million cut. Parents of about 30,000 low-income children will lose child-care assistance. The deadline for sequester will not be like the fiscal cliff that had everyone so hysterical.
That was really a fiscal curb, and when we actually did go over it, there were no terrible repercussions which could not be immediately undone.
Sequester is not like that. Once we go into it – I am told – it will be in effect through September. That means that the 20 percent cut in wages that will go through the federal workforce will be in effect through September.
We already saw the impact of the drop in defense spending that pushed the fourth-quarter 2012 GDP into decline for the first time since Obama pulled us out of the Great Recession. That was only the harbinger, the first red robin of what will happen.
“If the sequester is allowed to go forward, thousands of Americans who work in fields like national security, education or clean energy are likely to be laid off,” President Obama stated. “Firefighters and food inspectors could also find themselves out of work – leaving our communities vulnerable. Programs like Head Start would be cut, and lifesaving research into diseases like cancer and Alzheimer’s could be scaled back. Small businesses could be prevented from getting the resources and support they need to keep their doors open. People with disabilities who are waiting for their benefits could be forced to wait even longer. All our economic progress could be put at risk.”
Obama has offered a reasonable alternative. He has already made $2.5 trillion in cuts to the budget deficit (giving Republicans and Congress far too much credit). He has proposed eliminating the very tax loopholes that Romney and the Republicans claimed to support during the Presidential campaign – like the billions of taxpayer subsidy that go to Big Oil, the most profitable (if rapacious) industry in the history of mankind.
Senate Democrats have proposed a plan that would raise $55 billion by imposing a minimum tax on incomes of $1 million or more and ending some business deductions, while an equal amount of spending would be reduced from targeted cuts to defense and farm subsidies.
“Republicans immediately rejected the idea; the Senate minority leader, Mitch McConnell, called it ‘a political stunt,’” the New York Times wrote in its editorial. “Their proposal is to eliminate the defense cuts and double the ones on the domestic side, heedless of the suffering that even the existing reductions will inflict. Their refusal to consider new revenues means that on March 1, Americans will begin learning how austerity really feels.”
Republicans like to threaten that the United States will become “Greece” if we don’t sharply cut federal spending as the means to cut the budget deficit. But as economist Paul Krugman has written in countless columns in the New York Times, there isn’t a single example of a country that has turned around its economy using austerity – Greece and the United Kingdom are two examples of that approach failing dismally and tragically. On the other hand, Iceland, whose economy was collapsed by many of the same global mega-banks that destroyed our economy, was able to turn its economy around by resisting the austerity model.
But if Republicans get their way and impose austerity here, we will, in fact, become Greece.
Once one of the greatest civilizations mankind has ever known, a superpower which could exert its influence, reduced to nothing.
Great Neck Still has Stake in Nassau County GOP Gerrymandering; Legislature to Vote Feb. 25
Republicans aren’t just doing their dirty deals in Congress, but have been working diligently, since the 2011, to change the political map to negate the demographic and political realities on the ground.
And that is true, as well, in Nassau County.
Don’t be fooled by the latest version of the Republican map – concocted in secret and only revealed with minimal notice and with no actual concern for the hundreds of people who testified against it.
This latest version restores the Great Neck Peninsula, but that may well have been a bait-and-switch, a red herring to disguise the ultimate plan which now focuses on slicing and dicing Roslyn (now split into four pieces), the Five Towns, split into four pieces, and so on.
Great Neck may have one representative, but every other area of significant Jewish influence is cut into pieces so that they will be invisible and powerless in county politics.
The newest map still makes likely a 12-7 majority of the Republicans, regardless of the demographics which already favor Democrats (there are 30,000 more registered Democrats than Republicans and Republicans were able to keep control of the Legislature in 2011 by a mere few hundred votes).
Great Neck should come out in force on Monday, Feb. 25, when the full Legislature is expected to vote to adopt a final plan.
And if you know anyone in the Five Towns, who have a particular stake, tell them to call their legislator, Howard J. Kopel, a Republican, whose district has the most to lose. He could be the swing vote that saves Nassau County from a disastrous redistricting plan and costly litigation paid for by we, the taxpayers. His telephone number is 571-6207.
