Published Thursday, February 28, 2013
Of course, just like the "fiscal cliff" we never jumped off of, the nation will likely never see the so-called "sequester" or "automatic sequential budget cuts" that were agreed to by President Obama and Congress in the fall of 2011 come to fruition in March.
That's because the president, the politicians and the media will work the public and Wall Street into a frenzy, and we will have another of our national panic attacks leading to an eleventh-hour compromise. And of course that compromise will be some short-term patch that serves as another Band-Aid, while our debt situation gets further out of control.
But consider what happens if the automatic cuts actually do take place. According to Jamie Dupree, a reliable and veteran reporter on Capitol Hill, the sequester is not just a reduction in the rate of spending. He reports that the cuts would result in an actual baseline reduction in the federal budget for FY 2013. And while the amount of actual reduction might seem a drop in the bucket, it would be the first drop needed to start the flow of government funds moving in the right direction.
Of course, with Republican "inside the Beltway" experts convincing GOP lawmakers that the public will blame the GOP for the alleged economic meltdown we will incur from actually allowing the automatic cuts to take place, Republican leaders have started to exclaim that the very cuts they determined necessary in order to restore the nation's creditworthiness in 2011 are now no longer acceptable. And the Democrats, who controlled the Senate and passed the legislation, decry these cuts as well now that they are around the corner.
And don't forget President Obama. Dupree, who is completely nonpartisan, pointed out in his own blog that the legislation "was evidently his idea," along with that of the aforementioned parties in Congress. But now, as the tough medicine (which is really just a droplet) is about to be administered, the very cuts passed into law are creating another "crisis" that many argue will put us in another recession.
As noted before, for a lot of us the recession has never ended. And don't be fooled by those roaring good times on Wall Street. A little-known fact is that the Federal Reserve's endless effort at pumping liquidity into the market has included endless purchase of equities. It's easy to be on a high when oxygen is being pumped into a room. But just like might be the case in a casino or two, the high enjoyed while the oxygen is flowing goes away when the money is lost and the true light of day is confronted.
And don't be fooled as to true motives of the various parties in Washington. The biggest cuts in the sequester are to the military, and no one really believes that President Obama is upset over that. It's just that having the "bad Republicans" to blame for the various reductions and their impact is simply irresistible to Obama and his Democratic colleagues.
As for the Republicans, not only are many of them scared of their own shadow, but they are beholden to defense-related industries that have funded their political careers for years. It all sounded fine to pass this thing back in late 2011, but when it became clear that their tough action included dipping into some rather sacred wells, that created quite a different set of circumstances.
So now everyone in Washington is waiting for the doomsday stories to start running in papers and television news programs that not only spell out the human tragedy of those who will suffer as a result of real cutbacks, but also the dire economic impact that sequestration will cause. Then there will be the obligatory plunge in the stock market. The cable news networks will start their countdown clocks -- 120 hours and 12 seconds until sequestration ... and the end of time. It's all so predictable.
Why don't we just let one of these things really hit the fan? The Republicans might just find that not everyone blames them. The president might be forced to actually negotiate with a Republican House that has the upper hand. And we might finally see what all the politicians say they want -- a real live reduction in spending -- even if it's just a drop in the bucket.
(Matthew Towery heads the polling and political information firm InsiderAdvantage. His column is distributed by Morris News and Creators' Syndicate.)