White House: Sequestration Would Have Deeply Destructve Impct

Author: Market News International | Category: News

WASHINGTON (MNI) – The following is the text of the introduction to
the report by the White House Friday laying out the impact of the
across-the-board cuts — also known as sequestration — that are set to
kick-in at the beginning of next year.

“This report, which provides preliminary estimates of the
sequestration’s impact on more than 1,200 budget accounts, makes clear
that sequestration would have a devastating impact on important defense
and nondefense programs,” the White House said:

The Sequestration Transparency Act of 2012 (STA) (P.L. 112-155)
requires the President to submit to Congress a report on the potential
sequestration triggered by the failure of the Joint Select Committee on
Deficit Reduction to propose, and Congress to enact, a plan to reduce
the deficit by $1.2 trillion, as required by the Budget Control Act of
2011 (BCA). In response, the Office of Management and Budget (OMB) is
issuing this report based on assumptions required by the STA. The report
provides Congress with a breakdown of exempt and non-exempt budget
accounts, an estimate of the funding reductions that would be required
across non-exempt accounts, an explanation of the calculations in the
report, and additional information on the potential implementation of
the sequestration.

In August 2011, bipartisan majorities in both the House and Senate
voted for the threat of sequestration as a mechanism to force Congress
to act on further deficit reduction. The specter of harmful
across-the-board cuts to defense and nondefense programs was intended to
drive both sides to compromise. The sequestration itself was never
intended to be implemented. The Administration strongly believes that
sequestration is bad policy, and that Congress can and should take
action to avoid it by passing a comprehensive and balanced deficit
reduction package.

As the Administration has made clear, no amount of planning can
mitigate the effect of these cuts. Sequestration is a blunt and
indiscriminate instrument. It is not the responsible way for our Nation
to achieve deficit reduction. The President has already presented two
proposals for balanced and comprehensive deficit reduction. It is time
for Congress to act. Members of Congress should work together to produce
a balanced plan that achieves at least the level of deficit reduction
agreed to in the BCA that the President can sign to avoid sequestration.
The Administration stands ready to work with Congress to get the job
done. The estimates and classifications in the report are preliminary.
If the sequestration were to occur, the actual results would differ
based on changes in law and ongoing legal, budgetary, and technical
analysis. However, the report leaves no question that the sequestration
would be deeply destructive to national security, domestic investments,
and core government functions. Under the assumptions required by the
STA, the sequestration would result in a 9.4 percent reduction in
non-exempt defense discretionary funding and an 8.2 percent reduction in
non-exempt nondefense discretionary funding. The sequestration would
also impose cuts of 2.0 percent to Medicare, 7.6 percent to other
non-exempt nondefense mandatory programs, and 10.0 percent to non-exempt
defense mandatory programs.

The percentage cuts in this report, and the identification of
exempt and non-exempt accounts, reflect the requirements of the laws
that the Administration is applying. With the single exception of
military personnel accounts, the Administration cannot choose which
programs to exempt, or what percentage cuts to apply. These matters are
dictated by a detailed statutory scheme. The Administration does not
support these cuts, but unless Congress acts responsibly, there will be
no choice but to implement them.

On two separate occasions, the President has put forward proposals
to responsibly avoid these arbitrary cuts: first, in the President’s
Plan for Economic Growth and Deficit Reduction that was presented to the
Joint Committee in September 2011, and second, in the President’s fiscal
year (FY) 2013 Budget. Both of these plans made tough choices to reduce
the deficit with a balanced package of spending cuts and revenue
increases, with the FY 2013 Budget proposing $2.50 in spending cuts for
every $1 in new revenue. Both plans included over $4 trillion in deficit
reduction, including the deficit reduction in the BCA itself, far
exceeding the amount that would have been required of the Joint
Committee to avoid sequestration. Importantly, the President’s proposals
would ensure that deficit reduction is achieved in a way that asks the
top two percent of Americans to shoulder their fair share of the burden.
Instead of working to enact a balanced deficit reduction package to
avoid the threat of sequestration, some Members of Congress are focusing
on unbalanced solutions that rely solely on spending cuts or try to
alter only part of the sequestration. These proposals do not represent
realistic, fair, or responsible ways to avoid sequestration. Unlike the
President’s proposals, they are sharply contrary to the conclusions of
numerous independent and bipartisan groups that recommend a
comprehensive, balanced deficit reduction package comprised of both
spending cuts and revenue increases.

The House Republican FY 2013 Budget Resolution and the House
Republican Sequester Replacement Reconciliation Act of 2012 (SRRA)
represent particularly irresponsible approaches to addressing
sequestration. The BCA has already locked in almost $1 trillion of
discretionary spending reductions over 10 years, bringing nonsecurity
discretionary spending down to the lowest level as a share of the
economy since the Eisenhower Administration. The House Republican
proposals would further cut nondefense discretionary spending, refuse to
raise any revenue from the top two percent for deficit reduction, and
fail to address the Medicare sequestration. These proposals would shift
the burden of deficit reduction onto the middle-class and vulnerable
populations and represent the wrong choices for the Nation’s long-term
growth and prosperity.

This report, which provides preliminary estimates of the
sequestration’s impact on more than 1,200 budget accounts, makes clear
that sequestration would have a devastating impact on important defense
and nondefense programs. While the Department of Defense would be able
to shift funds to ensure war fighting and critical military readiness
capabilities were not degraded, sequestration would result in a
reduction in readiness of many non-deployed units, delays in investments
in new equipment and facilities, cutbacks in equipment repairs, declines
in military research and development efforts, and reductions in base
services for military families.

On the nondefense side, sequestration would undermine investments
vital to economic growth, threaten the safety and security of the
American people, and cause severe harm to programs that benefit the
middle-class, seniors, and children. Education grants to States and
local school districts supporting smaller classes, afterschool programs,
and children with disabilities would suffer. The number of Federal
Bureau of Investigation agents, Customs and Border Patrol agents,
correctional officers, and federal prosecutors would be slashed. The
Federal Aviation Administration’s ability to oversee and manage the
Nation’s airspace and air traffic control would be reduced. The
Department of Agriculture’s efforts to inspect food processing plants
and prevent foodborne illnesses would be curtailed. The Environmental
Protection Agency’s ability to protect the water we drink and the air we
breathe would be degraded. The National Institutes of Health would have
to halt or curtail scientific research, including needed research into
cancer and childhood diseases. The Federal Emergency Management Agency’s
ability to respond to incidents of terrorism and other catastrophic
events would be undermined. And critical housing programs and food
assistance for low-income families would be cut.

Because there is still time for Congress to act to prevent these
cuts, and because of the need to avoid unnecessarily diverting scarce
resources from other important Government functions, OMB issued guidance
to agencies in July instructing them to continue normal spending and
operations. Until Congress acts, the Administration will continue to
work, as necessary, on issues related to the sequestration and its
implementation. OMB will issue additional guidance regarding
sequestration in the months ahead as necessary.

However, no amount of planning can mitigate the significant impact
of the sequestration. The destructive across-the-board cuts required by
the sequestration are not a substitute for a responsible deficit
reduction plan. The President has already presented two proposals for
balanced and comprehensive deficit reduction, but under our
Constitution, he cannot do the job alone. Congress also needs to act.
The Administration remains ready to work with Congress to enact a
balanced plan that achieves at least the level of deficit reduction
agreed to in the BCA, and cancels the sequestration.

** MNI Washington Bureau: 202-371-2121 **

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