On Today's Edition of the DorobekINSIDER
But up front on this Tuesday: SEQUESTRATION
We’re going to hear a lot about sequestration this week. For both of you who haven’t been paying attention, sequestration is a provision of the Budget Control Act of 2011 -- it was the stick hanging out there for the super budget committee to reach a deal on long term spending cuts. Of course, the super committee did not reach a deal, and that is forcing sequestration. Sequestration is automatic, largely across-the-board budget cuts. And the sequester calls for reductions in government spending totaling $1.2 trillion over the next nine years, of which $984 billion, or $109 billion annually, will be realized from across-the-board budget reductions.
We’ve been telling you that there is wide-spread concern about the impact of these cuts. Dov Zakheim, who served as the comptroller for the Defense Department during the Bush 43 administration, writing in Foreign Policy, calls sequestration a disaster, and he says that sequestration poses the greatest single threat to American recovery in the near term.
The Aerospace Industries Association this morning released its analysis of the impact of sequestration. The trade group’s assessment, as conducted by George Mason University, projects 1.09 million lost jobs next year if sequestration takes effect. This represents a slight increase from AIA's 2011 version of the study, which said 1.01 jobs could disappear over the next fiscal year as a result of the automatic cuts.
The Hill reports that House Armed Services Committee Chairman Buck McKeon argues Washington is living in “a fantasy world” when it comes to the $500 billion in Pentagon budget cuts. McKeon (R-Calif.), who is one of Capitol Hill’s most staunch defenders of the military, tells The Hill he feels as though he’s run into a brick wall over attempts to stop the cuts, and he said he fears that Democrats and President Obama for failing to recognize the danger.
Meanwhile, Federal Times reports that sequestration is likely to spur a era of bitter legal fights with and among contractors as agencies reduce, scale down and terminate contracts.
The impact on government workers remains unclear. The Washington Post says there hasn’t been a detailed look into the potential effect on federal employees and retirees. However, a recent Congressional Research Service report noted that under a series of prior laws, some federal spending has been named as exempt from automatic cuts. This includes federal pay rates and retirement benefits, along with items such as interest payments on the national debt, Social Security and veterans benefits, and military pay rates, CRS said. But the Congressional Research Service report notes that it cannot say with certainty how these provisions may be interpreted and applied in a future sequestration, including the sequestration scheduled to occur in January 2013, or how potential ambiguities in language may be resolved.
A few closing items
One is a long story in Wired’s Danger Room about the Navy’s green fleet -- this was the attempt by the Navy to become independent of oil. The effort started in 2009, and the goal was for the Navy to get half of its fuel and power from clean, alternative sources by 2020. The Navy uses 1.6 billion gallons of petroleum each year, so it was quite a stretch. And Wired’s Danger Room says that it has failed because of the Navy’s incompetence -- their word, not mine. The Navy’s biofuel push could cost an extra $1.8 billion each year.
The Labor Department is overhauling the way economic data is released and stepping up the security on that data. The data is very market sensitive -- it can cause markets to rise or fall. And The New York Times says that there are rituals of high security, but government officials have become increasingly nervous that their process is vulnerable, and they are now overhauling it. After a yearlong review that included scrutiny by anti-hacking specialists from Sandia National Laboratories, officials at the Labor Department revoked the credentials of a few little-known news organizations that appeared to serve financial clients rather than the public at large. The government has also ordered other media groups to replace their computers in the lockup room with new computers under tighter controls.
Finally, we have to note that Aneesh Chopra, the first chief technology officer for the federal government, has announced that he is going to run for political office -- for the post of lieutenant governor in the commonweath of Virginia.