WASHINGTON — If you listen to the Democrats, the impact of the looming sequester will be dire, damaging military readiness, costing tens of thousands of people their jobs, and denying preschoolers access to Head Start. If you tune in to the GOP’s talking points, there’s nothing to worry about. Republicans say Democrats can make cuts that aren’t harmful, and that President Obama is exaggerating the impact of sequestration in order to raise taxes.
What’s the ordinary voter to think? Polls show that the American people do not like sequestration and support the “balanced” approach to cutting the deficit that Obama campaigned on. Strong majorities believe sequestration if it goes forward will hurt the overall economy and have a major effect on the military.
Yet the stock market is feeling no pain. Given these public attitudes and all the media attention devoted to the oncoming sequester, framing it like a freight train bearing down on the country, the stock market should be coming off the rails. Instead, it’s going gangbusters, roaring back after a drop on Monday of 216 points.
Maybe the stock market is as disconnected from Washington as the rest of the country, or worse, the stock market is in its own bubble, as remote from real people as the politicians. Either way, with no substantive discussions slated as yet to avoid the March 1 sequestration deadline, the voters will get to judge which side has the better argument — that it’s a hurtful instrument, or that it can be easily absorbed in a budget worthy of a super power.
Both Republicans and Democrats can be accused of overplaying their hands, understandably because this is a battle for the hearts and minds of the voters. Sequestration, if it takes effect, will put the squeeze on programs, with some being impacted immediately while others will take more time, weeks or months for the adverse effects to be felt.
The White House is working hard to counter the GOP notion that it is picking and choosing among programs for maximum hardship to make a political point.
Education Secretary Arne Duncan told reporters Wednesday that federal aid to school districts that don’t have a property tax base, like the ones around military bases and on Native American reservations, will likely have to scale back the school week to three or four days to save money.
Duncan also said that two of his department’s biggest pots of money are for poor children and for children with special needs.
If the president had more discretion in picking and choosing where to cut, it would still be a no-win situation with children paying the price for Washington’s failure to find a compromise that would avoid sequestration.
Republicans maintain that cutting 2.5 percent from the federal government isn’t a big deal, and they would have a point if that was the true figure. With only seven months left in the fiscal year and entitlement programs like Social Security and Medicaid exempt from the axe, the true figure for Defense Department cuts is 13 percent; and for domestic programs, it’s 8 percent. And it gets worse. There are untouchable elements within the Defense Department, such as payroll for the men and women in our Armed Forces. Take these elements out of the equation and the Defense Department cuts for its remaining programs probably amount to as much as 30 percent. The same goes for domestic programs.
On the other hand, the government is not without funds, only the authority to use them. For example, the Fed’s $85 billion-a-month program of Quantitative Easing (printing money to buy back government and other securities) is pouring billions of dollars into the Treasury every month.
And the public seems to intuitively understand this. The means to solve the problem are there, and it is assumed our elected officials will figure out how to connect the dots.
U.S. News Syndicate, Inc.