News Column

How Much Will Sequester Cuts Really Hurt?

February 26, 2013

Jonathan Tamari, Jane M. Von Bergen, and Kristen A. Graham

Sequester

Most of the capital seems resigned to the idea that looming budget cuts will start hitting states, cities, schools, and government contractors throughout the country Friday.

The new question has become: How much will the cuts really hurt?

The White House says Head Start might serve fewer Philadelphia-area children. Cash-strapped schools would have to dig deeper. Defense contractors such as Boeing could be hit. Aid for Sandy relief could be cut.

But some Republicans question whether President Obama is just using scare tactics.

As local governments, defense giants, and service organizations brace for "the sequester" -- a technical term for $85 billion in automatic spending cuts scheduled to begin Friday -- Obama and his Democratic allies have spent the last two days sounding alarms about the potential impact on services, schools, jobs, and a still-fragile economy.

"You're making $85 billion of cuts in a seven-month period, and there's no good way to do that," said Jason Furman, principal deputy director of the National Economic Council.

Republicans, in turn, have accused the administration of putting forth what U.S. Rep. Jim Gerlach called "doomsday predictions" instead of solutions.

"It's about time this president showed some leadership and stopped trying to scare people," Gerlach (R., Pa.) said in an e-mail.

The cuts would reduce federal spending by 9 percent for domestic programs and 13 percent for defense by September, with some exceptions in each category. More would follow -- $1.2 trillion in automatic cuts are scheduled by 2021.

Among the effects that the White House has laid out in the last two days would be a $3 billion cut in relief for Hurricane Sandy -- "insult to injury to the many families and businesses that are still hurting," said U.S. Rep. Bill Pascrell (D., N.J.).

Defense cuts would force furloughs of 37,000 civilian defense workers in Pennsylvania and New Jersey, according to the Obama administration.

People receiving long-term unemployment aid could see their weekly checks reduced by 10 percent.

The cuts would slash $26.4 million in school aid to Pennsylvania and $11.7 million in New Jersey, and slash support for Head Start, the early-childhood education program for low-income families that has more demand than it can meet in Philadelphia.

The reductions would eat into college aid and funds for the National Institutes of Health, which underwrites extensive research in Philadelphia, and hit local hospitals.

But while the White House released facts and figures aimed at painting a picture of the abstract debate, it's not clear how fast the cuts will hit -- some within weeks, others not as quickly -- or how long they may last.

A bipartisan deal after the Friday deadline could quickly ease or erase the cuts, and a March 27 budget deadline provides another opportunity for negotiations. (The sequester, originally set to hit Jan. 1 as part of the fiscal cliff, has already been delayed once.)

It's also unclear how exactly the reductions will be implemented. Would some children be pushed out of Head Start entirely, as the White House is warning, or would the cuts be spread evenly across the program, reducing resources for all but maintaining enrollment?

Furman acknowledged on a conference call Monday that some of the cuts could be spread differently than in the scenarios the White House has circulated.

In Pennsylvania and New Jersey, public and private leaders met the latest round of budget brinkmanship with a mix of genuine worry and anxious waiting. Many said there was not enough information to gauge the potential fallout.

"This is all uncharted territory for everyone," said Andrew Lee, a spokesman for Boeing, one of many defense contractors waiting to see whether their work will be curtailed. At its Ridley Park plant, 6,200 employees manufacture two military helicopters -- the Chinook A-47 and most of the Bell-Boeing V-22 Osprey. It's not clear whether that work will be affected.

At Philadelphia International Airport, "we don't know what the local impacts are going to be to service, if any," said spokeswoman Victoria Lupica, though the Obama administration has predicted the sequester will trigger longer waits at airports due to cuts in security personnel and furloughs of air traffic controllers.

The Philadelphia School District could lose $16 million to $17 million in federal grants, said Matthew Stanski, chief financial officer. That's significant in a district that recently had to borrow $300 million just to pay its bills for the rest of the year. "These federal grants target our neediest students."

He has asked district officials to begin drafting plans for what they would reduce if the cuts come to pass, he said. The district has a waiting list for Head Start, but the cuts would mean 250 fewer slots for children, he said.

In Washington, Democrats stressed that regardless of how the cuts hit, resources would be lost for a wide range of worthwhile programs.

"They're not strategic, they're not smart, they're not focused on priorities," said Sen. Bob Casey (D., Pa.).

Sen. Pat Toomey (R., Pa.) said he is hoping to add some flexibility to the reductions. "Across government, most programs can afford to be cut some. But we ought to be more thoughtful and precise about those cuts."

The head of the Pennsylvania Department of Military and Veterans Affairs, Adjutant Gen. Wesley Craig, said he was working to find ways to avert furloughs of 1,700 technicians though methods such as deferred maintenance on helicopters.

"Never done anything like this before, so I don't have any real true data, but you can guarantee that it would start to degrade that fleet," Craig said.

About 5,000 Defense Department workers in Philadelphia could be affected by sequestration, with some facing furloughs of up 22 days, estimated John F. Garrity, president of the International Federation of Professional and Technical Engineers Local 3, the union that covers technical civilian employees for the Navy.

"It doesn't look good," Garrity said.

The Democratic warnings and GOP pushback comes after weeks of the two sides blaming one another for the looming cuts -- which Obama and both parties agreed to in a 2011 deal to raise the debt limit.

Obama has called for replacing cuts with "balanced" deficit reduction that includes new tax revenue, raised by closing loopholes, and more measured spending cuts. Republicans want to replace defense cuts with more reductions to domestic programs.

The issue does not seem to have gained traction with the public, which has seen Obama and House Republicans push one another to the edge of fiscal calamity many times over the past three years, only to avert the problem at the last moment.

The cuts were never expected to happen. Instead the threatened reductions were supposed to be a penalty so odious that the two parties would be forced to come together for a long-term deficit reduction plan. They didn't.


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Source: (c)2013 The Philadelphia Inquirer. Distributed by MCT Information Services


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