Brace Yourselves, Sequestration is Coming

In George R.R. Martin’s fantasy classic and popular HBO series, A Game of Thrones, winters are described as lasting decades, sometimes a lifetime. Winter brings a host of terrors and the struggle to survive, but due to political squabbling, few of the characters concern themselves with preparing for the winter. The federal government now faces an ominous threat in sequestration, yet political squabbles have erased almost all hopes for a resolution. Cheap metaphors aside, the threat of a long, “fiscal winter” for the government draws ever closer, and federal officials have taken note.

At last week’s Excellence in Government Live event, attendees from across government packed rooms to hear budget experts, not typically the most popular brand of speakers, explicate the budget battle ensuing on the Hill. The consensus was not optimistic.

Sequestration, automatic budget reduction, was placed into the 2011 Budget Control Act as a threat to spur the budget ‘super committee’ into action. The super committee failed to reach a consensus, and so budget cuts between 8.5 and 10 percent for FY2013 are slated for January 2, 2013 should Congress fail to pass a budget resolution in time.

Agencies, however, have just nine months to achieve the cuts as FY2013 begins in October. The effective monthly rate is then between 11.3 and 13.3 percent. Sequestration is not a one off occurrence, either. It is a ten year budget reduction, essentially freezing agency accounts for the next decade.

Norm Ornstein, a resident scholar at the American Enterprise Institute, detailed to attendees what a cut to the budget might look like. In 2011, the Food Safety and Inspection Service pulled nine million pounds of tainted meat off the shelves. Cutting twenty percent of inspectors to achieve necessary program reductions would likely leave around one million pounds of tainted meat on shelves. With E. coli and salmonella infections on the rise, the Centers for Disease Control and Prevention, also facing a stiff budget cut, would likely be overwhelmed. You can infer the rest.

Despite the looming threat, both political and public will to solve the problem have almost completely disappeared. Experts told officials not to expect any resolution before the November election as compromise would be politically volatile for either party. William Hoagland, a long time U.S. Senate Budget Committee staff member, noted that after the election there simply will not be enough time for Congress to reach an agreement.

James Hearn, Director for Federal Programs and Budget Process at the United States Senate Committee on the Budget, told attendees that he had seen no energy on Capitol Hill to solve the problem beyond a potential continuing resolution. Stan Collender, a long time budget expert and writer of the blog, “Capital Gains and Games,” stated the budget battle was at a stalemate, where tea party congressmen have openly told him that “compromise is a sin.” Ornstein, who has been in and around government for 40 years, stated he had never seen it this dysfunctional.

And don’t expect much public outcry until the effects of sequestration are felt in the economy. Michael Dimock, Associate Director for Research at the Pew Research Center for the People and the Press, told attendees at the event that the public is under a “chicken little” effect. Over the past year, the public has been told the sky is falling so many times that it is burned out. The public is now largely apathetic.

The lack of public interest is not a statement on the public’s view of federal agencies. Dimock showed that agencies are still rated very high and, “In fact… the [Internal Revenue Services’] favorability rating has actually gone up over the last decade...It’s a sign that this is not a blanket judgment on all aspects of government.” Americans simply want government that costs less, not government that does less.

The pressure will be on employees to be more productive and “do more with less.” Though direction from the Office of Management and Budget should be forthcoming, Collender asserted that the OMB is “flying by the seat of their pants,” citing an inside source. Officials then should pay special attention to the appropriations language of the Gramm-Rudman-Hollings Act of 1985 as sequestration will cut across “program, project, and activity” as defined by the Act, Hoagland stated. The effects of sequestration will depend on how officials define those appropriations under their purview. In working with the Hill, Collender reminded attendees to be mindful that politically popular programs are not necessarily the most effective programs. He continued stating that any cuts offered by agencies would be quickly swallowed up by the Hill, which would then ask for even further reductions in what is “a giant game of prisoner’s dilemma.”

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