How Sequestration Gets Even Worse Next Year

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"How Sequestration Gets Even Worse Next Year"

NavyShipsIn 2013, sequestration’s automatic, across-the-board cuts shaved $85 billion from government programs, reducing overall spending from over $1 trillion to $986 billion. That figure will drop to $967 billion next year if sequestration remains in place. Meanwhile, the accounting gimmicks and emergency measures many agencies have used this year to shield programs from the harm won’t be available any longer.

“[T]he tricks that many agencies employed — deferring maintenance, using unspent money from earlier years, cutting staff by attrition — are likely to be exhausted by 2014, when federal departments must trim an additional $24 billion from already tight budgets,” Jonathan Weisman reports at the New York Times.

For example, while Congress passed a bill that allowed the Federal Aviation Administration (FAA) to move funds around and undo furloughs that were hampering air travel, that meant the agency took $253 million from its construction budget. But it will have to install buffer areas at the end of all runways by 2015 by law, “impossible if its construction money continues to be redirected,” Weisman writes. On top of that, moving funds out of necessary construction projects will cost the agency in the long run.

The Department of Defense will have to cut $52 billion in 2014. While the Navy found $1 billion in unspent money from prior years and canceled some contracts to reduce the impact this year, next year those tactics won’t be available and “every ship in the fleet is expected to be affected.” The Army deferred maintenance on a variety of equipment and vehicles but another $73 million in maintenance costs will hit next year.

The Commodity Futures Trading Commission, which regulates some crucial financial markets, staved off furloughs this year by delaying new hires, using up money from 2012, and transferring $10 million in funds. But the chairman of the agency just announced that the next year will bring as many as 14 furlough days for its employees.

Other programs weren’t so fortunate and had to make severe cuts this year, and they are now facing another round of harsh cuts. The schools on or near military bases and Native American reservations that receive federal Impact Aid were hit by sequestration right away, and in order to absorb the second round 96 out of 298 are laying off teachers and 112 are laying off support staff, 46 are eliminating extracurricular activities, and eight have outright closed schools. Head Start had to kick preschoolers out of their classrooms when the cuts began in March and this school year they had to remove 57,000 children from of the program. Public schools had generally avoided the cuts for the 2012-2013 school year but had to factor them in for 2013-2014, which has meant that more than half have fired personnel.

Sequestration may have had a muted impact in some areas this year, but it devastated others. Meals on Wheels is delivering far fewer meals. Cancer patients were denied chemotherapy. Housing vouchers were revoked from some families and support for the homeless was rolled back. Domestic violence programs have cut back on services. Long-term unemployment checks were reduced. Scientists had to fire staff and cancel projects. Federal agencies that oversee fraud and waste and collect vital data have been hampered.

The cuts have also taken a bite out of the economy, creating a drag on growth, consumer spending, and wages. Without the cuts, the economy could add as much as 1.2 percent to GDP and 1.6 million jobs.

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