StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



sequester

Posted by Stan Collender

Last August and September, I did a series of eight posts about how, contrary to Tea Party and John Boehner assertions, federal spending was actually very popular. As I said at the time, Americans don't want less government; they just want government that costs less.

The latest installment -- episode 9 -- happened last week when the air traffic control problems caused by the sequester were fixed in what by congressional standards was warp speed.

Faced with an immediate backlash from flyers, Congress and the White House enacted legislation that fixed the problems less than a week after the furloughs caused long delays in the skies and long security lines at the airports.

Yes...Flyers are a relatively elite group relative to the population at large. Yes...this is a group that has more influence and a larger megaphone than the average voter. And yes...the delays were easier for the media to cover and so were more visible than sequester-related reductions in other programs.

Posted by Stan Collender

I've been meaning to ask this question for a while: Isn't this the equivalent of a tax increase?

Here's the story.

The sequester spending cuts forced the superintendent of Yellowstone to decide not to clear the winter snow from the park's road as early as it typically had been plowed in the past because...well...it will eventually melt as the weather gets warmer anyway. That seems like a perfect solution to the sequester-caused spending cut except for the businesses in and around the park. No plowing meant no tourists, and that meant much less business.

According to this story by Mark Barabak in the Los Angeles Times, the prospect of lower sales convinced many of the tourist-related businesses around Yellowstone to pay for the plowing. The Cody and Jackson Wyoming Chambers of Commerce raised $170,000 to get the snowed plowed.

Wasn't this the equivalent of a tax increase for those people who paid to have the snow cleared two weeks early?

Posted by Stan Collender

How did the sequester happen? How is it possible that what supposedly was the worst possible way to cut the deficit somehow became what actually happened?

Over the weekend Ezra Klein, in a much retweeted blog post that was the talk of large parts of the political blogosphere, said that the GOP was never going to make a deal to avoid the sequester if it included a tax increase. Nothing...not the prospect of reductions in military spending, not the projected reduction in GDP, not the estimated increase in unemployment, not the lost possibility of a bigger deal to reduce the deficit and not the overwhelming likelihood that Republicans would get blamed for all of this...made any difference.

The GOP's position seems to defy all economic and political commonsense until you realize how much GOP politics have changed in recent years.

Posted by Stan Collender

I don't use the word "defense" much when talking about the federal budget because it always prejudices the conversation. U.S. military spending isn't always defensive; it often is appropriately offensive and changing the name in 1949 from the Department of War to the Department of Defense should go down as one of the top 10 greatest public relations achievements of all time.

So why did I violate my own rule and use the word "defense" in the headline to this post? To make a point: In spite of all the spin and all the warm feelings Americans supposedly have about the military, Congress was more than willing to throw defense spending under the budget bus in the sequester. When it was a question of tax increases and Medicare reductions vs the Pentagon, not only did the Pentagon lose, but it wasn't even on the field or the same game.

Posted by Stan Collender

What's happened so far on the sequester is the equivalent of spring training in baseball and pre-season in football: It doesn't count and isn't necessarily indicative of what's ahead.

But everything changes today as the sequester that so far has only been hypothetical and something primarily discussed inside the beltway starts to become real for increasing numbers of voters outside Washington.

This is not an insignificant number of people. Polls taken over the past week or so show that only about 25 percent of Americans say they have been following the sequester argument (It's really hard to call it a "debate"). That number will increase rapidly as the sequester spending cuts reduce federal services that people rely on and like and voter emotions change from amusement to annoyance to outrage.



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