If you are like every elected politician in Washington and have successfully ignored sequestration for the last 19 months, button up. The effects of the federal government’s disastrous financial policy are beginning to kick in.
Worse yet, another round of horrendous financial news is waiting on March 27, when the “Continuing Resolution” that currently funds government operations, expires. If that happens, it could mean shutdowns for all government offices.
More on that in a moment. Let’s start with today’s crisis: Sequestration.
As of March 1, the government is going to have to live on 98 percent of what it used to spend. That means 2 percent fewer services, contracts and aid for Americans who work for, work with or depend on the U.S. government to make their way in life.
Two percent may not sound like much, until you realize it amounts to $85.3 billion, which can fund a lot of jobs and programs. It means, among other things, longer delays trying to get through airports, fewer people available to do food inspections, suspended research in lots of scientific fields, and the release of hundreds of illegal immigrants from detention centers.
A Problem without a Solution
Those detainees actually were released earlier this week. Homeland Security said it didn’t have the money to house 300 or so detainees because of anticipated budget cuts, so they it them leave the centers with the promise they’d come back when it was time for their cases to be tried.
Republicans screamed loudly that this was an unnecessary political stunt done to embarrass them. Democrats screamed back that the Immigration and Customs Enforcement’s hands were tied because Republicans wouldn’t do anything about the budget cuts that sequestration is forcing.
And that’s how government works these days: Both sides blames each other for problems neither one wants to work at resolving.
Sequestration was part of the deal President Obama and Congress agreed to in August 2011 to start the process of reducing the budget deficit by $1.2 trillion over 10 years. Since then, they haven’t been able to agree on how to make it happen without simply cutting every program across the board.
Obama met March 1 with House Speaker John Boehner, House Minority Leader Nancy Pelosi, Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell to discuss the subject. Boehner described it as a “listening session,” meaning no one expected much to come from it.
In the meantime, most government agencies are scrambling to figure out what to do with 2 percent less funding.
Some areas – Social Security, Medicaid, Pell Grants, VA benefits, Defense Department spending on wars and military pay and benefits – are exempt from being cut. A few others, the Small Business Administration, Government Accounting Office, the Agency for International Development and Smithsonian Institution, anticipated the problem, reduced their spending well in advance and won’t need to impose layoffs or furloughs to make budget.
Who’s Affected the Most?
The rest of the government, however, is going to feel the pinch. So are the people who rely on those departments and agencies, most noticeably the people involved with the Federal Aviation Authority and Transportation Security Administration. Those two agencies provide the manpower that runs control towers and security screenings in the nation’s airports.
The FAA stands to lose $600 million in funding between now and Sept. 30, which could affect staffing in as many as 50 percent of the nation’s control towers. Big airports, like Chicago O’Hare, are preparing for flight delays averaging 44 minutes.
The TSA expects to furlough 50,000 officers and eliminate overtime for employees. Homeland Security Secretary Janet Napolitano, whose department includes the TSA, said wait times at airport checkpoints could be as long as four hours during the busy summer travel season.
Research firms – studying everything from cancer to new weapons programs – will take a huge hit as well. The Department of Defense estimates it will cut $300 million in projects between now and Sept. 30. NASA indicated it will cut $726 million. The National Science Foundation said it would cut 1,000 research grants; and the National Park Service expects to hire fewer seasonal workers and close some areas to the public.
If you aren’t feeling the impact from all that, you will when you start looking for a refund on your tax return. The IRS likely is going to have to furlough some employees next month in order to absorb its share of the 2 percent cuts. Fewer people poring over the 240 million tax returns Americans will file this year, means a longer wait for those getting refunds.
Maybe worse news: There is another “fiscal” deadline approaching. Because the Senate has failed to pass a budget the last four years, the federal government is operating under something called a “Continuing Resolution.”
That resolution, or spending bill, provides the funding to all departments and agencies. It has to be renewed by March 27 or it could trigger a shutdown of all government offices.
Depending on how things go with sequestration between now and then, that might not be such a bad thing.
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it seven years ago, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering college and professional sports, which are the fantasy worlds of finance. His work has been published by the Associated Press, New York Times, Washington Post, Chicago Tribune, Sports Illustrated and Sporting News, among others. His interest in sports has waned some, but his interest in never reaching for his wallet is as passionate as ever. Bill can be reached at email@example.com.
3 Minute Read
- Karp, G. (2013, February 28). FAA: Sequestration could force O’Hare tower, runway to close at times. Chicago Tribune. Retrieved from http://www.chicagotribune.com/business/breaking/chi-ohare-tower-runway-at-risk-in-sequestration-faa-chief-says-20130227,0,5028807.story
- Laing, k. (2013, February 27). TSA chief: Sequester would impact airport security most during summer. The Hill. Retrieved from http://thehill.com/blogs/transportation-report/tsa/285291-tsa-chief-sequester-would-impact-airport-security-most-during-summer
- Davidson, J. (2013, February 20). Budget cuts could result in up to 20 percent pay cut for federal workers. Washington Post. Retrieved from http://www.washingtonpost.com/national/budget-cuts-could-result-in-up-to-20-percent-pay-cut-for-federal-workers/2013/02/20/0595a64e-7b93-11e2-82e8-61a46c2cde3d_story.html