02.07.2013 2

The true story of sequester

By Bill Wilson A little discussed impact of sequestration, due to take effect on March 1, is the fact that after 2014, spending will increase every single year in both defense and non-defense categories, reports the Congressional Budget Office (CBO).

In addition, there are real spending cuts, but they come nowhere near to totaling the $1 trillion figure that has been reported by various government agencies, including the CBO, not to mention media outlets and even this organization, Americans for Limited Government.

That is, not the way you, I, or any sane human being would define a cut — which is simply how much less one will be spending from the prior year.

In Washington, D.C., a “cut” is how much less spending will increase from the government’s preplanned wish list.

Keep those distinctions in mind as you read forward. The cuts we will be discussing are the common sense, how-much-spending-will-actually-be-reduced-from-the-prior-year frame of reference. Because that’s the only number that actually makes sense, or even matters to the American people.

Now to the cuts.

To be fair, defense as a category was spending $699 billion as recently as 2011, when it peaked. It dropped to $670.3 billion in 2012 in cuts unrelated to sequestration. And if sequester goes into effect, it will drop again to $639 billion for Fiscal Year 2013, and again to $593 billion in 2014 before it begins to rise.

That’s a total of $77 billion of real cuts to defense as a result of sequestration, after which spending increases. In fact, it will rise every year through 2023, when CBO projects its budget will total $714 billion.

Compare that to the often reported $500 billion figure of defense “cuts” being bandied about, which it turns out are really just reductions in the previously projected growth rate of spending. Or to budgeting authority, to keep it simple.

In non-defense discretionary spending, spending has decreased from $658.3 billion in 2010 to $615 billion in 2012. It will fall additionally to $609 billion in 2013 under sequestration, and then again to $577 billion in 2014. After that, spending rises.

That’s a total of $38 billion of real cuts to non-defense discretionary spending as a result of sequestration. That’s nowhere near the $300 billion in “cuts” that has been reported.

So, for defense and non-defense discretionary spending combined, that’s $37.3 billion of real cuts in 2013, and another $78 billion in 2014. After that spending will increase every single year.

The rest of sequester will come out of the “mandatory” category of spending, but those “cuts” will be more than offset by tremendous spending increases elsewhere on that side of the budget.

For example, sequester partially hits Medicare, but for that program spending will rise from its 2012 level of $551 billion to $592 billion in 2013, to $605 billion in 2014, and so forth. CBO never foresees a decrease there.

Let us pause for a moment and consider the magnitude of the mess we’re in.

Consider, the Budget Control Act, which reduced budgeting authority by $1 trillion over ten years will only yield $115.3 billion of actual, real cuts over a two-year period, after which spending increases, something the Cato Institute’s Dan Mitchell has been at the forefront of reporting. That is the true story of sequester.

That means to balance the budget with our annual trillion dollar deficits, budgeting authority would likely need to be slashed by anywhere from $5 trillion to $10 trillion over ten years.

And even then, the actual, real cuts to spending might only total $500 billion or so before the budget reached balance, and spending was again allowed to increase.

Imagine the headlines reported for a proposal like that, relative to the reporting we’ve seen over the relatively tiny sequester. And, already, members of the House Republican conference are waffling over whether or not to even keep those cuts.

Some are accepting Obama’s false premise that sequester will be “economically damaging,” and others still who would rather raise taxes on millions of Americans instead of cutting defense spending for a single year or two.

The point that must be made is that the American people were promised these cuts.

To secure the votes needed to suspend the $16.394 trillion debt ceiling until May 19, House leaders had to promise members they would stick to the sequestration.

In fact, all of these cuts were the price for increasing the debt ceiling by $2.1 trillion in August 2011. Imagine that, $2.1 trillion in new borrowing authority, that the government burnt through in less than two years — in exchange for just $115.3 billion of real cuts.

Now it’s questionable if those will even be kept in place. If the House caves on sequester, members’ promises of cuts down the road will forever ring hollow and empty to the American people. If the Republican Party does not stand for getting our fiscal house in order and keeping the tax burden low, what does it stand for?

It is time to stand strong on the sequester. This is no time to go all wobbly — because much, much more needs to be done down the road to save this country from certain bankruptcy.

Bill Wilson is the President of Americans for Limited Government. You can follow Bill on Twitter at @BillWilsonALG.

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