Sequester: Doom or Snooze? 5 Points of View

Everyone’s got an opinion on the sequester, from “the sky is falling” to “ho-hum.”

Here are a few more perspectives on the impact of the $85 billion in federal spending cuts that kick in March 1.

The sequester saves Social SecurityLaura Clawson on Daily Kos

Daily Kos staffer Clawson makes the argument that an alternative deal to stave off sequester likely would “gut Social Security.” Social Security and Medicare benefits are protected from the automatic cuts. But she quotes Rep. Jerry Nadler, D-N.Y., as saying, “If you go in and decide to fix sequestration, how much longer can you exempt entitlements? It’s difficult to do if you want to get bipartisan agreement.”

Cutbacks to Social Security office staff won’t be a huge deal. Moe Lane on RedState

RedState writer Lane pokes fun at the worries of Scott Lilly, a budget expert at the Democratic think tank Center for American Progress. Lilly told the Washington Post that smaller Social Security offices could be closed, forcing consumers to endure long drives to other offices and longer waiting times.

Here’s Lane: “Now, never mind that only an urban liberal who possibly doesn’t even own a car would think that ‘drive 40 miles’ is as much a pronouncement of DOOM as Scott Lilly apparently thinks that it is; it’s also kind of entertaining that Mr. Lilly apparently has never heard of this marvelous new thing called the “Internet.” You see, when it comes to Social Security, you can use the “Internet” to, say, put in an application.”

The think tank’s budget analyst writes: “The sequester won’t reduce the deficit by anything close to the $85 billion that’s being advertised. What’s more, it may not reduce the deficit at all. There are a number of reasons why this is the case.”

Here are three examples of revenue that Uncle Sam will miss out on:

  • User fees from federal services that are cut during the sequester (think reduced air travel).
  • Revenue that would have been collected by furloughed workers (think the IRS and tax cheaters).
  • Savings that would have been found by investigations into waste, fraud and abuse (think Medicare).

“Even if the percentage increase in the number of erroneous or excessive claims that make it through the [Medicare] system as a result of this cut is relatively small, the dollar impact will be large considering that the agency will make more than $300 billion in payments to providers over the coming seven months,” Lilly writes.

The sequester leaves seniors in the cold. Alliance for Retired Americans

A March 1 statement by the advocacy group says: “Without the Low-Income Home Energy Assistance Program (LIHEAP) assistance, many seniors will not be able to pay their heating bills. Without transportation service assistance to help them perform vital tasks like going to the doctor or picking up prescriptions, many retirees will face hardship.”

The ‘$85 billion in cuts’ aren’t really $85 billion. Josh Boak and Eric Pianin on Fiscal Times

The Fiscal Times contributors write: “Politicians keep talking about $85 billion in spending cuts. Technically, you should halve that figure because agencies can draw from stockpiles of unused funds from past years. The sequester applies to how much money is authorized, not how much federal agencies actually spend.”

And they quote from a client note by Bank of America economists Ethan Harris and Joshua Dennerlein: “This excess budget authority rolls over from year to year. These programs can use this excess budget authority to count towards their sequester requirements.”