Sequestration — What it really means
With all the fear and rhetoric going on about the sequestration and the impending deadline for the “across the board cuts in federal spending” to take place in less than a week, I think it is important to take everything in context and understand how we got to this point, the real numbers involved, and the implications of what this means for our government and ourselves.
Sequestration was a term and idea that came to be during the summer of 2011 when the U.S. Congress was in a financial battle over how to deal with the federal budget (our annual projected spending at a federal level) and our federal deficit (how much our nation is in debt).
At the time our national debt was just under $15 trillion, and we were going to max out our national credit card. (By the way, $15 trillion represents 15 million millionaires — that’s a lot of money!)
Many advocated that we raise the debt ceiling to avoid this fiscal crisis, but a few people said we should not raise the debt ceiling because the longer we delayed dealing with the issue of debt and government spending the more difficult and severe the solution would be when we did finally had to deal with it.
The House, the Senate, and the President were at an impasse on how to deal with the issue.
As a solution to this impasse, President Obama’s administration proposed the idea that if the debt ceiling was raised, the government would demonstrate fiscal discipline by imposing sequestration that would decrease the federal government’s rate of spending by approximately $1 trillion over the course of 10 years starting in 2013.
With nearly half of these decreases hitting our military, it was presumed Republicans would never allow it, and with the other half coming from domestic spending, it was presumed Democrats would never allow it. Both parties and the president would have to work together to find a better long-term solution.
In the end, all parties conceded. The debt ceiling was raised. The sequestration trigger was put in place and the crisis was delayed until now.
Once again, we are in “financial crisis” and less than a week away from the across-the-board reductions. Last week, the president made dire warnings of what would happen if sequestration did go through, and it ranged from civil servants losing their jobs to the very safety and security of our nation being at risk. He stated that these were very real, potential consequences.
However, even a cursory look at the projected numbers, in my humble estimation, seems to be disproportionate to the president’s stated consequences.
Of the $1 trillion over 10 years, approximately $85 billion would hit this year. This amount represents less than 2 percent of the federal government’s $3.65 trillion budget.
Of this budget, approximately two-thirds are non-discretionary and would be paid automatically.
So, reductions in spending would have to come from non-discretionary side of the budget, or $1.2 trillion.
An $85 billion dollar reduction still represents approximately 7 percent of the federal government’s budget.
Wow, only 7 percent!
The federal government cannot exercise the fiscal discipline to cut 7 percent of non-discretionary spending?
When I look at my own family, we’ve had to make some major cuts in our own budget to adjust for the increasing cost of food, clothes, and gas. And all of these have gone up a whole lot more than a mere 2-7 percent!
Bottom line, it appears to me the discussion around sequestration is less about actual numbers and more about what the act represents — a process that is forcing all political parties to curtail their spending that precious few of our officials seems to want to do.
My gut reaction is that if this is how our federal government responds to such a modicum degree of fiscal discipline, imagine if they had to deal with the cuts we, the American people, have had to make when it comes to our own budgets in recent years.
Exercising discipline in any area of life is never easy, but it is what mature, responsible people have to do. Hopefully, the same will one day be said for our federal government.
[Bonnie B. Willis is co-founder of The Willis Group, LLC, a Learning, Development, and Life Coaching company here in Fayette County and lives in Fayetteville along with her husband and their five children. She writes occasional opinion columns for The Citizen.]