The Actual Effects of Taking Away 2% of the Punch Bowl


Tuesday July 2nd, 2013   •   Posted by Craig Eyermann at 7:02am PDT   •  

MAWA00000401-source-maggie-l-walker-national-historical-site-nps-govWhatever happened to the scary budget sequester?

If you’re like most Americans, you probably haven’t noticed any real impact to your daily life from spending cuts that the U.S. government has actually implemented during the last three months. Which is probably a very different experience from what you might have expected given how loudly the federal government’s bureaucrats were screaming at the prospect of having just 2% of their punch bowl taken away from them.

And that disconnect between the claims of bureaucrats and reality is something that even the journalists of the Washington Post would appear to have finally noticed:

Before “sequestration” took effect, the Obama administration issued specific—and alarming—predictions about what it would bring. There would be one-hour waits at airport security. Four-hour waits at border crossings. Prison guards would be furloughed for 12 days. FBI agents, up to 14.

At the Pentagon, the military health program would be unable to pay its bills for service members. The mayhem would extend even into the pantries of the neediest Americans: Around the country, 600,000 low-income women and children would be denied federal food aid.

But none of those things happened.

Sequestration did hit, on March 1. And since then, the $85 billion budget cut has caused real reductions in many federal programs that people depend on. But it has not produced what the Obama administration predicted: widespread breakdowns in crucial government services.

The Post’s writers report on their checking of 48 of the dire predictions made by the heads of a number of federal government agencies, finding that 11 could be considered to have come true, 24 were clearly proven false and the remaining 13 provided no evidence of any impact one way or another. That makes for just a .229 batting average in terms of the trustworthiness of claims made by the federal government’s bureaucrats.

Almost all of the worst case impacts that were as bad as predicted occurred in the Department of Defense, which is bearing about 50% of the brunt of spending cuts imposed through the budget sequester. Almost all of the worst case impacts that were predicted for non-defense agencies turned out to have little or no meaningful impact on the American public or trivial impacts for the ones that were as bad as “expected”.

For example, cuts in the “emergency” unemployment benefits for the long-term unemployed were described by the Washington Post as being worse than expected. But in terms of the actual impact to the people receiving such payments, what it means is that the payments for some individuals (those who live in states that pay very generous unemployment benefits, such as Massachusetts) may be reduced by as much as $450 this year, or about $75 per month through the end of the federal government’s fiscal year in September.

Singling out Massachusetts, the unemployment benefit paid per month with that maximum reduction would still be greater than the regular unemployment benefits paid in 44 other states.

We should also note that the Emergency Unemployment Compensation program, which was introduced in 2008 with the onset of prolonged unemployment, and which provides extra unemployment compensation for people’s whose regular state unemployment benefits have expired (typically after 26 weeks), has long been set to expire on January 1, 2014. So all the long-term unemployed who receive benefits as part of the program would lose all of those benefits at that time in any case — not just the portion covered by the sequester.

Unless the bureaucrats find a way for the “emergency” in unemployment to continue. Americans should ready themselves for new rounds of bureaucratic budget screaming this fall!

Featured Image:
Maggie L. Walker National Historical Site



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