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Economy

Scott Walker Touts Job Growth That Ranks Wisconsin Seventh-To-Last In Nation

Wisconsin Governor Scott Walker (R) is pushing a report from his administration’s Department of Workforce Development that puts the state’s net private-sector job gains at 32,000 for 2012. Federally tallied figures for all states won’t be available until June, as CBS affiliate WSAW explains, which renders comparisons impossible:

Walker’s Department of Workforce Development released the new figures on Thursday, but they can’t be compared to other states until next month. Walker has been releasing the figures before they are published officially by the U.S. Bureau of Labor Statistics.

Critics say the state’s performance can’t be adequately measured until the numbers can be compared with other states. The most current ranking, comparing jobs created between September 2011 and September 2012, showed Wisconsin was 44th in the nation.

Walker is claiming a two-year total gain of 62,000 private-sector jobs, and a table on page 3 of the state’s report acknowledges the public sector is employing about 8,500 fewer people than it did the month before he took office. That puts the governor less than one quarter of the way to his campaign pledge of 250,000 total jobs created in four years.

If any independent organization would be likely to defend Walker’s record, it would be the conservative U.S. Chamber of Commerce. But the Chamber’s most recent annual scorecard of state economies has the state near the bottom in job creation, as the Madison Capital Times noted shortly after the report was released:

Its annual scorecard on state economies ranked Wisconsin 44th for overall economic performance and 50th — as in dead last — for short-term job growth as measured between September 2010 and November 2012. It also has Wisconsin 39th in “business climate” — on par with the state’s ranking under Gov. Jim Doyle.

Walker’s early-term agenda focused on busting public worker unions in the state and slashing state spending. His successes in pursuing those legislative goals amount to a localized version of the austerity approach to economic growth which Republicans have pressed with less success on the national level. Following the billions in budget cuts he pushed upon taking office, Walker has proposed both further cuts to school budgets and a tax cut that’s heavily slanted towards the state’s wealthiest residents.

Those policies have pulled demand out of the state’s economy, undermining Wisconsin’s growth prospects. Beyond the paltry jobs progress Walker is touting, U.S. Commerce Department figures show the state ranked near the bottom in terms of personal income growth over the 2011-12 period.

Economy

Congressman Justifies Huge Food Stamp Cuts: Recipients Are ‘Dependency Class’

The House Agriculture Committee approved a farm bill late Wednesday night that would cut federal food stamps more steeply than any legislation since the welfare reforms of the 1990s. A Democratic amendment to strip $20.5 billion in Supplemental Nutritional Assistance Program (SNAP) cuts was defeated by a 27-17 vote, after more than an hour of debate.

In introducing the amendment to protect SNAP funding, Democratic Rep. Jim McGovern (MA) noted that cutting food stamps comes with many expensive unintended consequences – hunger undermines worker productivity, and malnutrition increases medical costs – and that every dollar of spending returns much more than a dollar of economic output. In response, Republican Rep. Steve King (IA) alleged that the White House is seeking to swell the SNAP rolls in order to make Americans more dependent on government:

REP. KING: Handing out benefits is not an economic stimulator. But we wanna take care of the people that are needy, the people that’re hungry, and we’ve watched this program grow from a number that I think I first memorized when I arrived here in Congress, about 19 million people, now about 49 million people. And it appears to me that the goal of this administration is to expand the rolls of people that’re on SNAP benefits. And their purpose for doing so in part is because of what the gentleman has said from Massachusetts. Another purpose for that though is just to simply expand the dependency class.

Watch:

But the reality for SNAP recipients is far from King’s image of a “dependency class.” The Center on Budget and Policy Priorities explains that “only 4 percent that worked in the year before starting to receive SNAP did not work in the following year,” and adds that the raw total of recipients who work while enrolled in the program has tripled since 2000.

The think tank also notes that SNAP’s role as an unusually efficient stimulative multiplier is backed by Moody’s Analytics and the Congressional Budget Office.

Furthermore, the program keeps hundreds of thousands of vulnerable Americans out of the deepest pits of poverty, and even as the Great Recession swelled SNAP rolls, the program continued to push its erroneous payments rates to record lows:

Two of the Democrats on the Agriculture Committee — Ranking Member Collin Peterson (MN) and Rep. Mike McIntyre (NC) — joined Republicans in supporting the cuts, which will cause two million people to lose their benefits.

Economy

Congressman: Sequestration Is A ‘Legitimate’ Way To Cut The Budget

Joining other Republicans who trumpet automatic, across-the-board cuts to preschool, education, unemployment benefits, and health services, House Judiciary Chair Bob Goodlatte (R-VA) said sequestration is “a legitimate effort” to implement budget cuts in a Wednesday address to the Ripon Society:

[There are] a whole array of other issues including the profligate waste in all sectors of the government as the administration attempts to vilify sequestration, a legitimate effort to cut 2.5 percent of the entire federal budget or about 7-8 percent of domestic and defense discretionary spending. At a time when the Department as purchased a new prison at a cost of $170 million when we have four new prisons all standing empty, and at a time when they are having $12 cups of coffee and $10,000 dollars pizza parties. So there will be questions there about why it is necessary to put deportable aliens, many of them criminal aliens, out on the street to save money where they can commit crimes against citizens of the U.S.

Goodlatte has expressed selective outrage over the budget cuts affecting immigration enforcement and airports. However, his home state Virginia will lose millions for primary and secondary education, affecting hundreds of teachers and 14,000 students, nearly $3 million for clean air and water services, child care for 400 children, vaccine services for more than 3,500 children, and much more. The Huffington Post also outlined 100 ways the sequester is hurting local communities across the country. But Goodlatte has zeroed in on the release of non-violent immigrants, who can be tracked through cheaper methods than detention at the cost of $164 a day.

This represents a marked change in the GOP’s tone on the sequester and a shift to blame the White House after forcing the sequester agreement in the first place. Reps. Mike Pompeo (R-KS), Raul Labrador (R-ID), and Blake Farenthold (R-TX) have downplayed how budget cuts have hurt everyday Americans to instead claim it is “working.”

Climate Progress

The First Cuts Are the Deepest: Sequester Cuts Increase Health, Climate Risks

“I don’t know whether it’s [sequester] going to hurt the economy or not. I don’t think anyone quite understands how the sequester is really going to work.” – John Boehner, 3/3/13

Speaker of the House John Boehner (R-OH) claims he did not know whether the automatic budget cuts (or sequester) imposed by the Budget Control Act would hurt Americans, but he must not have been paying attention. In February, the Center for American Progress predicted that “Sequester Will Expose Americans to Greater Health Risks and Other Perils.”

Ten weeks after the budget sequester took effect on March 1, the House Appropriations Committee Democrats released “Report on Sequestration Effects and Efforts to Mitigate its Impact.” This brand new analysis confirms many of our predictions that the sequester cuts threaten Americans’ health, safety and well-being.

The sequester cuts in energy and environment related programs generally have had the following impacts so far:

  • Less ability to fight wildfires
  • Greater exposure to climate related extreme weather
  • Less protection from air pollution
  • Reduced protection for national parks and other protected places

Climate Progress Deputy Editor Ryan Koronowski described the impact of budget cuts on our ability to fight wildfires this summer in what many experts believe will be quite a vicious fire season.

The sequester will expose Americans to additional risks from climate change. The House Appropriations Committee Democrats report that

Read more

Climate Progress

Worsening A Warming-Fueled Wildfire Season, Sequestration Threatens Firefighting Efforts

Due to sequestration, the federal government will be at least $115 million short of normal wildfire fighting capacity during this year’s wildfire season. This is particularly problematic as large portions of the U.S. face a serious drought and extremely dry conditions. As the Washington Post reported, Agriculture Secretary Vilsack said “I hope we can get through this fire season without any fatalities.”

A new report from the House Appropriation committee Democrats found that the Forest service “will have 500 fewer firefighters, 50-70 fewer fire engines, and two fewer aircraft because of sequestration.” Some of the equipment it does still have is outdated — such as the 50-years-old-on-average tanker planes that have crashed multiple times in the last decade, killing 14 people.

A Fox News radio AM talk show expressed incredulity that President Obama and Agriculture Secretary Vilsack “could not find $115 million of fat in the budget so they cut firefighters.” One of the more harmful aspects of sequestration is that the cuts take place “across-the-board” and do not permit the same flexibility in moving funds around within an agency.

Because last year’s wildfire season was so severe, the USDA Forest Service faced a $400 million shortfall for active firefighting and had to borrow money from fire prevention programs to cover the costs. These programs included paying for brush removal from public lands and protecting against invasive plants, disease, insect infestations, and fires. Eventually Congress reimbursed the Forest Service for the shortfall via the 2013 Continuing Resolution but the delays hurt prevention efforts. Last year’s fire season consisted of 67,700 fires burned 9 million acres.

This year, as of May 3, there have been 13,115 wildfires, burning 153,000 acres. Compounding the restraints posed by the inflexible sequester, agencies foresee a $700 million deficit in direct firefighting activities, so similar programs will be de-funded (such as a hazardous-fuels-reduction program to remove long-burning combustible materials from the path of fires).

Congress calculates wildfire suppression funds by averaging the cost over the last ten years. As climate change worsens drought year after year, this calculation becomes deficient. The wildfire season used to range between June and September, but has now expanded to include May and October.

The Western U.S. faces low mountain snowpack, and the most recent U.S. Seasonal Drought Monitor Outlook finds that “drought is forecast to either develop or persist across the western contiguous U.S. as this region enters its dry season.”

Dry conditions in nearly half the country make hampered fire management budgets and sequestration cuts even more dangerous for residents and will lead to even more shortfalls this season. A recent report found that climate change will double the area burned by wildfires by 2050.

Drought and wildfires, in addition to harming people and property, also have dramatic impacts on insects like monarch butterflies, as well as mammals, birds, reptiles, and nearly every plant in the region.

Local communities are trying to face climate adaptation issues alongside the federal government. Texas is preparing for record drought by creating a “rainy day” infrastructure water fund, though none of the legislators acknowledge that climate change is a primary cause of increasing droughts.

A recent report from the General Accounting Office found that the federal government needs to do a better job helping local governments adapt to climate change and integrate climate impacts into infrastructure planning. The report identified roads, bridges, wastewater systems, and federal facilities as particularly vulnerable. Sequestration makes it nearly impossible for the federal government to help local communities adapt to and prepare for climate change-fueled extreme weather and wildfires.

Economy

How Piecemeal Fixes Will Make Sequestration Worse

Photo credit: The Memphis Flyer

A report out today from the Democrats on the House Appropriations Committee shows costly new flaws in Congress’ approach to fiscal policy. Beyond providing updated information on the anticipated impacts to specific programs from the across-the-board spending cuts known as sequestration, the report shows Congress’s piecemeal approach to “fixing” sequestration is more than just unfair – it’s costing the U.S. more money.

Since the threat of sequestration failed to spark a spending compromise and the haphazard slashing began, lawmakers have faced uneven amounts of pressure to replace chunks of sequestration cuts from varying groups. The success of that pressure seems to hinge on the political influence wielded by the group affected by a given cut. Unemployment beneficiaries, Head Start students and parents, 140,000 families on housing assistance, and seniors who rely on Meals on Wheels, among many other politically marginalized groups, have received no relief from sequestration.

Business travelers, on the other hand, have seen their outcry over airport delays due to sequestration yield a “fix” for the Federal Aviation Administration.

Today’s report goes beyond that unfairness to explain how the piecemeal “fix” to avert flight delays is actually raising the economic costs of aviation delays, by tens of billions of dollars:

The [Reducing Flight Delays] Act [of 2013] allowed the FAA to apply sequestration to the Airport Improvement Program (AIP), which had been exempt in the original sequestration order. […]

Cutting the AIP program slows FAA’s ability to meet construction needs. FAA estimates that development needs at eligible airports will exceed $42.5 billion over the next five years. The American Society of Civil Engineers 2013 “Report Card for America’s Infrastructure” rated our aviation system a “D,” estimating that the cost of congestion and delays to the economy will rise to $34 billion in 2020 (up from $22 billion in 2012), and that “D” grade assumes we continue to spend at current funding levels — before sequestration.

Even before Congress gave the FAA permission to halt all airport construction funding, America faced a $12 billion increase in the economic drag caused by aviation congestion. Now that cost is going to swell.

These can-kicking costs come on top of the more immediate damage sequestration will do to the economy: 700,000 fewer jobs and a 0.6 percentage-point reduction in GDP growth for the year. The Huffington Post reported several of the mechanical details of individual agency responses to the cuts contained in today’s House report, including 500 fewer firefighters at the Forest Service and a shrunken stockpile of vaccines at the Centers for Disease Control and Prevention.

Health

Budget Cuts Have Left Massachusetts Unable To Inspect Food Plants, Hospitals, And Air Quality

A half-decade of budget cuts has left Massachusetts’ public health department so understaffed that it cannot keep pace with a massive backlog of safety inspections for public facilities and investigations into Americans’ complaints about medical mismanagement and malpractice. State public health officials are now begging lawmakers for more funding in order to prevent another public health disaster like last year’s deadly meningitis outbreak, which stemmed from unclean conditions at an uninspected Massachusetts pharmaceutical mixing plant.

The Boston Globe reports that the budget cuts are so steep that there is now a five-month waiting period for investigating consumer complaints at Massachusetts nursing homes, clinics, and hospitals — including for sexual abuse and medical malpractice complaints. Other facilities such as summer camps, biotechnology firms, and food plants are simply bypassing routine inspections due to the dearth of state inspectors.

Funds were appropriated for surprise inspections of pharmaceutical facilities like the one at the root of last December’s meningitis outbreak — but only temporarily. That has public health officials and Gov. Deval Patrick’s (D) administration worried that the Commonwealth is unprepared for another outbreak barring more funds, since the surprise inspections found rust and mold at many such facilities. The state legislature has only appropriated a portion of the funds so far:

“The department has done a herculean task at doing the best it absolutely can with the resources that have understandably been short over the past half decade,” Dr. Lauren Smith said in an interview last week, her last as interim public health commissioner.

Over the past four years, the bureau responsible for health care safety has seen its budget reduced by about $4.7 million, a 26 percent cut when adjusted for inflation, according to an analysis by the Massachusetts Budget and Policy Center.

Smith said the department needs to make the case for more funding “before there is any adverse outcome for any particular patient.” [...]

The House included the pharmacy money in its budget, but not money for the additional inspectors the administration sought.

But even if funds for additional pharmaceutical inspectors are restored in the legislature’s budget, they still won’t be enough to address the logjam of medical complaints. That’s a major problem, since the existing backlog “means that inspectors performing routine reviews often are unaware of the pending issues,” and cannot incorporate them into their investigations.

Seeing as Patrick has been governor since 2007, he had to have signed off — and even advocated — every budget that cut funding for the public health department and led to the current resource shortage. That underscores the unfortunate reality that, while conservatives are often scrutinized for undermining health initiatives, Democratic leaders are also tempted to balance their budgets at the expense of important public health programs.

California Gov. Jerry Brown (D) has paired his support of Obamacare’s Medicaid expansion with big cuts to local counties’ funding that critics say could cripple important community medical resources. In Massachusetts, Patrick himself has fought to shutter state mental health hospitals, arguing that there are already “too many hospital beds” in the state and that patients can simply pack up and go to other mental care facilities — even though such hospitals tend to be dispersed across long distances.

Health

Four Better Ways To Spend The $55 Million Wasted On Votes To Repeal The Affordable Care Act

For the 37th time since 2011, House Republicans will hold a vote to repeal Obamacare on Thursday, bringing the total cost of all of their failed repeal votes to roughly $55 million in taxpayer money, according to one estimate.

Last year, CBS News calculated that the number of hours spent on 33 repeal votes — then roughly 80 hours, or two full work weeks — cost taxpayers an estimated $48 million. Since then, Republicans have held three more votes (another $4.5 million) and will add another $1.5 million with their latest.

At a time when lawmakers have implemented $85 billion in across-the-board cuts on top of $1.5 trillion in spending cuts over the next decade, no dollar can be spared. And the country has serious health-related needs that could use funding. Here are some better health care uses for the more than $50 million these symbolic votes against the Affordable Care Act have wasted:

1. Restore cuts from sequestration to Title X family planning programs and Title V maternal and child health services. The National Women’s Law Center calculates that a 5 percent cut to the budgets of each program will reduce them by $15 million and $32.5 million, respectively. Rather than voting to repeal a bill that expands women’s access to preventative services, the House could use the money to expand them.

2. Double the Department of Justice’s budget for sexual assault services, which has currently been authorized a $50 million budget. The program gives money to states so that they can support rape crisis centers and other nongovernmental organizations that provide direct intervention, core services, and other assistance to the victims of sexual assault. Current funding is inadequate, as some states receive less than $300,000 and many programs lack the resources to meet victims’ needs.

3. Grant a request for $50 million to train 5,000 new mental health professionals as part of a new initiative to expand mental health treatment and prevention services. This proposal came in the wake of the Sandy Hook shooting to address gaps in the mental health system.

4. Help states implement paid leave policies. President Obama included a $50 million State Paid Leave Fund in his 2011 budget to provide start-up support for states that want to enact paid leave for workers. More than 40 percent of workers don’t have access to paid sick leave, heading to work when they or their family members experience an illness, but this funding could help give them a better option.

The current Congress is on track to be the most unproductive since the 1940s, but still has time to hold votes that won’t result in actual legislative change. There are many other priorities lawmakers could focus on instead and better ways to spend taxpayer dollars.

Economy

Warnings For U.S. As Eurozone Austerity Produces Longest-Ever Recession

Two weeks after announcing a record high unemployment rate, Europe’s official economic analysts today revealed another first for the currency union: The Eurozone’s ongoing recession is now the longest in the 14-year history of the euro. The Guardian notes the European economy has now shrunk a full percentage point over the past year:

The eurozone has slumped into its longest recession ever, after economic activity across the region fell for the sixth quarter in a row. […]

France, Spain, Italy and the Netherlands all saw their economies shrink as the economic crisis in the eurozone continued to hit its largest economies.

Eurostat’s figures showed that the eurozone economy has now contracted by 1% over the last year, putting further pressure on leaders as unemployment climbs to new record highs.

The 0.2% contraction in the first quarter of 2012 was an improvement on the 0.6% drop recorded between October and December, but analysts warned that the eurozone’s economic outlook is darkening.

This is the second ugly bit of record-setting in two weeks, after the Eurozone’s unemployment rate hit 12.1 percent at the end of April. It was the 23rd consecutive month of record-breaking unemployment, with 26.5 million people out of work.

These records seem to have created some space for European policymakers to begin at least discussing an end to austerity. For example, French finance minister Pierre Moscovici reacted to the news that France’s economy had contracted for the second straight quarter by calling for pro-growth policies to return across the Eurozone.

So far, however, the damagingly aggressive reduction in deficits is projected to continue in Europe. And American deficits are now projected to dip even more dramatically than those in Euro countries.

The drop in aggregate Eurozone deficits looks alarmingly similar to the rapid decline in U.S. deficits CBO now projects for 2013. According to European Commission projections for 2013, the countries that use the euro will have cut their combined deficits to 2.9 percent of GDP by the end of the fiscal year, down from 6.4 in 2009. The new CBO figures predict U.S. deficits are shrinking even more dramatically, to 4 percent this fiscal year from over 10 percent in 2009.

In other words, as Europe’s deficit-slashing fever produces a record contraction, American policymakers are learning they’ve outdone their Old World colleagues. But where Europe’s outright contraction may be forcing a policy reversal, slow but steady economic growth in the U.S. seems to be obscuring the lessons from bad headlines across the Atlantic.

Economy

Amid New Data About The (Shrinking) Deficit, Will Washington Finally Focus On Jobs?

The budget deficit will shrink to its smallest level since before the Great Recession in 2013, and it will continue shrinking through 2015, according to revised estimates from the Congressional Budget Office released Tuesday. In reality, the deficit is even smaller than the CBO predicts, since its “current law” projections assume that funding for the war in Afghanistan and federal disaster relief for states hit by Hurricane Sandy will continue in perpetuity. But that funding isn’t endless, and it will bring the deficit down to even smaller levels.

Still, under CBO’s projections, the deficit is now half as large as it was in 2009, the year President Obama took office:

If the current laws that govern federal taxes and spending do not change, the budget deficit will shrink this year to $642 billion, CBO estimates, the smallest shortfall since 2008. Relative to the size of the economy, the deficit this year—at 4.0 percent of gross domestic product (GDP)—will be less than half as large as the shortfall in 2009, which was 10.1 percent of GDP.

The deficit is shrinking so rapidly because of spending cuts and new revenues and because CBO continues to revise down projected health spending. But that the deficit is shrinking so rapidly isn’t necessarily good news — as U.S. News and World Report’s Pat Garofalo put it, it is instead “one more piece of evidence showing that the economic discussion that has gripped Washington recently is absurdly backwards.”

Despite smaller deficits, congressional Republicans remain focused on spending reductions, and the most recent round of cuts has kicked children out of preschool, left cancer patients without needed screenings, and gutted programs that help low-income Americans in a variety of ways. Those cuts have also threatened to derail the economic recovery, which has sputtered along despite the headwinds created by a consistent focus on deficit reduction. In past recessions, increased government spending has pulled the U.S. to recovery. In this one, it has only made recovery harder.

The crisis the U.S. is facing isn’t the deficit. It’s that the unemployment rate is still 7.5 percent, and more than 4 million of those workers have been off the job for at least six months. A shrinking deficit might be good news in the long-term, but it isn’t putting people back to work or sparking a robust economic recovery. And yet, even with evidence that stimulus policies like the American Jobs Act would help, and despite the fact that the deficit continues to subside, congressional Republicans aren’t just ignoring the devastating impacts of sequestration — they are pushing for even more spending cuts in the immediate future.

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