Tuesday, February 26, 2013

Sequester Bulls**titis

Over the past month, we've been looking at what may happen if Congress allows "The Austerity Bomb" that's more commonly referred to as "The Sequester" to explode. This morning, The Sun posted an article on how "The Sequester" will hit Nevada. Hint: It won't be pretty, but it will be quite painful & ugly.

“In Southern Nevada we’re really concerned. McCarran has 41 million come through that place every year,” Sen. Harry Reid said Monday. “We’re told there are going to be long waiting lines [due to "Sequester" mandated TSA cuts]; we don’t need that, it should be avoided —it’s unnecessary.” [...]

In its state-by-state report, the White House estimated that Nevada would lose almost $13 million in federal funding for primary, secondary and special education programs. That equates to 170 teacher and teacher aide positions that might be eliminated.

Head Start funding and child care grants are also on the list of cuts.

In public health, more than $1 million will disappear from programs such as child vaccines, HIV testing and infectious diseases. Several hundred thousand dollars are also set to be slashed from police initiatives, and job training. [...]

“These are not just numbers in a spreadsheet; real people will be hurt by arbitrary across-the-board cuts,” said Rep. Steven Horsford, D-Nev. “We already receive low levels of federal funding to support critical programs in Nevada. We don’t have enough funding in Nevada to start with, and the sequester will leave us with even less.”

Yep. This is what we're set to get. And we're getting this "Austerity Bomb" because Republicans held the debt ceiling hostage in 2011.

Remember this. Remember this when they now cry about "#Obamaquester" or some other new cutesy Twitter hashtag they're using to describe their own manufactured crisis.

Their political games are causing real economic pain out here in the real world. Earlier today, Katrina Vanden Heuvel noted just how out of touch Capitol Hill's austerity fetish is with the economic reality of this country.

The stark reality is the economy is still in trouble and Americans are still hurting. The economy contracted last quarter, even before Americans got hit with the end of the payroll tax holiday, which will take $1,000 out of the typical family’s annual paycheck. The Congressional Budget Office projects that growth will inch along at about 1.5 percent this year. That translates into continued mass unemployment — with more than 20 million people in need of full-time work — and falling wages. The richest 1 percent captured an unimaginable 121 percent of all income growth in 2009 and 2010, coming out of the Great Recession. They pocketed all of the growth in income, while 99 percent of Americans actually lost ground. That trend is likely to get worse rather than better.

Federal Reserve Governor Janet L. Yellen described the tragic human costs of widespread, long-term unemployment in an important speech this month. Families lose their homes; divorce and depression rise; children are scarred; skills are lost. A young generation is leaving school to sit on the couch.

Yet most of Washington — from the newly reelected Democratic president to the self-described insurgent Tea Party Republicans — is ignoring this reality to focus on cutting deficits.

The Republican Congress seems intent on letting the “sequester” take place — the idiotic across the board cuts that were explicitly designed to be anathema to both parties. Senate Democrats call not for repealing these cuts, but for “paying for” delaying them for a few more months.

Why this fixation? Deficits aren’t careering out of control. In fact, as the Congressional Budget Office reports, in relation to the economy, the deficit has fallen faster over the past three years than at any time since the demobilization after World War II. Calls for cutting Medicare benefits ignore the reality that the slowing rise in Medicare costs has already cut about $500 billion from its projected costs over 10 years compared to estimates made two years ago.

In fact, the too-rapid and premature decline in deficits in a weak economy is hindering any recovery, as Yellen noted.

That's the problem. Instead of focusing on furthering economic recovery, President Obama has to try negotiate with Congress to end yet another manufactured crisis. Yet because "The Overton Window" on Capitol Hill has shifted so hard in the direction of austerity, we've had to choose between a little austerity and a whole lot of austerity.

But again, we ignore Europe at our own peril. Austerity has only produced Great Depression levels of economic misery in Greece & Spain, and it's thrown most of the rest of the European Union into a prolonged double-dip recession. Austerity isn't working in Europe, so why should we think it will help America?

Go ahead and take a closer look at the fallout from this "Austerity Bomb" explosion. And remember how we reached this point. Keep these in mind when you hear the Beltway pundits spinning their way to complete absurdity on "the blame game".

Greg Sargent, along with Brian Beutler and few others in DC (but not infected with the weird disease plaguing many other media pundits there), thinks an end to this latest manufactured crisis is near.

I’d only add that Democrats have literally no incentive to do anything other than follow this course [of letting Republicans cannibalize each other]. After all, there’s no reason for them to agree to any package of cuts to replace the sequester, since no package of cuts is preferable to them. What’s more, the current public opinion environment favors Democrats on not one, but on two levels. The public overwhelmingly favors the Democrats’ approach to bringing down the deficit —through a mix of spending cuts and new taxes on the wealthy — so Dems are already favored to win the basic policy argument that will unfold and be dramatized for voters throughout the month of March. Democrats will be arguing that we should replace the cuts with something voters actually want. Republicans can only continue to argue for more spending cuts to replace the sequester — which will only deepen the public’s identification of Republicans as the party of the sequester cuts in the first place.

More broadly, this will unfold in an environment in which general opinion about Obama is far more favorable than it is about Republicans. The new Pew poll today finds that an astonishing 62 percent of Americans think the GOP is out of touch with the American people, versus only 46 percent who think that about Dems — a 16 point gap.

It remains unclear how many Republican officials will break with the leadership in the spending/defense divide. Justin Green makes the case that this divide is overstated and that the spending hawks have broad dominance within the GOP. That said, defense hawks like Lindsey Graham and John McCain have now signaled an openness to new revenues. If they mount a very public campaign (including the Sunday shows) to pressure their leadership to accept new revenues, it’s conceivable that divide could deepen. And when the threat of a government shutdown looms, that could grow worse, with public opinion suddenly looming as large as it did during the shutdown fight in the mid-1990s. As we’ve seen in the payroll tax cut fight and fiscal cliff battle, these sorts of pressures can result in sudden, unexpected stampedes of GOP officials coming out and calling on their leadership to admit that the game is over.

Perhaps this will finally happen. It's just too bad that Republicans in Washington allowed their "TEA" fueled madness to get us to this point. And we still need for the likes of Dean Heller & Joe Heck to stop playing "the blame game" and clean up the mess they helped create.

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