November 14, 2011 at 2:28 pm #145685
9 days until the Super Committee deadline to cut $1.2 Trillion in spending. Their options are to significantly cut spending or to increase taxes. Prominent members on both sides of the 12 person committee have publicly said that they would not do either.
If no action is taken by the committee, the law mandates a default decision: The defense budget will be cut by $492 billion. Another $492 billion will be cut from health, education, drug enforcement, national parks, agriculture programs, and Medicare.
What would deadlock in the Super Committee mean to you?
November 15, 2011 at 1:40 pm #145761
Just one more justification to enact term limits on ALL elected offices!
November 15, 2011 at 2:21 pm #145759
More of what it would mean to the country. If the U.S. were a household, this is like saying, ok., since we can not decide how to spend our money, we will cut out half a bedroom, and then pay only 80% of our utility bills, telephone bills, etc. Pretty soon, this incompetent household would be out on the street with a cardboard sign.
Seriously, let’s just cut 10% of our police and have the crime. Let’s just not investigate or clean up 10% of the Meth messes and have people downstream drink the polluted groundwater.
But if we do this, let’s be sure NOT to spend the money we’ll need for extra prisons, hospitals, etc. Just let those folks go as part of the default decision.
November 15, 2011 at 3:59 pm #145757
Stacy L. CarpenterParticipant
The view from private sector and impacts:
A small government committee charged with one task of immense importance that impacts everyone in the country can’t get it together in the slightest way. As the deadline approaches, the likelihood of success is reduced. The perception that the “top” people are incompetent grows and filters to perception of other officials. If the top people can’t function, what must the other officials be like? The lack of movement on the committee gives no reassurance to a business that a more stable future is on the horizon. As a company that is planning 3-5 years out on a 10 year plan, one can’t tell what is coming for costs, policies, general market stability or trend. All assets go on lockdown, growth is on hold, companies go under and layoffs continue. Companies seek markets outside of the US to increase revenue and augment losses felt in the US. This does not help the US economy. Nor does it help foreign investors confidence when it comes to predicting a return on their investments if they invested in the US.
For citizens, this means higher incurred public assistance costs with lowered budgets for such services and a paradigm shift in what this country’s culture is.
We’re in a unpleasant and predictable cycle and it needs to be broken.
November 15, 2011 at 5:36 pm #145755
“I’d rather entrust the government of the United States to the first 400 people listed in the Boston telephone directory than to the faculty of Harvard University.” — William F. Buckley (1925 – 2008)
November 16, 2011 at 1:04 am #145753
Amen to that.
Honestly, I think more would be accomplished if 12 randomly selected anonymous people sat down in a room and looked over things….with no lobbyists, no press, no constituents, no friends, no buddies, just some practicality and common sense and a willingness to do a job rather than push rhetoric.
November 16, 2011 at 2:42 am #145751
It would mean having to explain to people why unemployment benefits all stopped cold. While it’s not hard-linked to the supercommittee negotiations – not being able to agree on this does not bode well for the program’s renewal. The GOP will most likely take them hostage and it’ll get hostile at work.
November 16, 2011 at 5:24 am #145749
A huge problem with the “trigger” is that it appears to be an ATB. ATB’s–especially as this one seems to be written–leave very little if any flexibility for an agency to manage reductions in a smart manner; an ATB at double or near double digit levels is basically like using a meat cleaver to perform surgery. As I understand the law; flexibility was built in for DoD to move money around to protect military personnel accounts; but no flexibility was built in for any agency to shuffle their cuts (ie, cut more from one account and less from another but come to the same overall total) around in order to protect civilian personnel accounts; a grave oversight on the law’s part–or for that matter, to shuffle the exact distribution of their cuts to protect critical and mission-essential non-personnel accounts; another grave oversight on the law’s part.
Sure, 9 percent is bad. Very bad. But what’s worst of all by a factor of a thousand is that it’s a 9 percent across the board. If there was instead more agency discretion in where to take the cuts (more from one account, less from another, etc; within an agency), things might be a heck of a lot less catastrophic.
November 16, 2011 at 1:04 pm #145747
Deadlock would mean next to nothing. First, the required sequestration would not kick in until 15 days after the next session of Congress adjourns, which will not happen until late 2012 or early 2013. Second, we went through this in 1986 with Graham, Rudmann, Hollings. The world did not come to an end and the growth of Federal spending was largely unaffected. Third, various Senators are already discussing waiving the sequestration requirements. Finally, the results of the elections next year will have much greater impact on the course of government spending than any of the posturing going on right now. We’ll get a CR through December 16th followed by an omnibus or full year CR and drive on at essentially the same level of funding we’ve had for the past three years.
November 16, 2011 at 1:13 pm #145745
Lisa L SeayParticipant
Cuts or taxes? Is that all? How disingenous. One would think a “Super-Committe” would be given super powers of creative problem-solving to think outside of that impossible box. Or have we lost all of our good ‘ole American know-how that made us the land of freedom and innovation. If the U of F can create “Gatorade” and bolster it’s economy for the foreseeable future, can’t we, the people, create something to get ourselves out of this mess. It’s not them and us, it’s us and us! Where are the wise advisors of past administrations that stepped in, or were called in, to bring fresh eyes to penetrate the government morass? Have we all sold our souls to the devil? Will pride and greed be really be this great country’s downfall?
November 16, 2011 at 1:19 pm #145743
Lisa — It was the wise advisors of past administrations and the elder statesman of past Congresses who valued bipartisan cooperation more than partisan ideology that came together to kick the can down the road to our generation without ever making any meaningful attempt to actually solve the problem. If they had dug in and fought for their principals instead of compromising them at ever opportunity; we probaly wouldn’t be in this mess today.
November 16, 2011 at 5:11 pm #145741
Since I work for the Department of the Navy, it may have some effect on some of the work I do. I won’t feel the effects of the cuts immediately, but eventually, I will. However, cutting the education budget is not a good thing. How can we attract the best teachers to teach our children when you don’t have the money to pay them? How can you keep the buildings maintained and repairs done timely when there is no money in the budget to do so? I hope the supercommittee will get over politics and do what is right for the American people.
November 16, 2011 at 5:27 pm #145739
This information is a little dated, so the numbers are a little bigger than what’s revealed in this video, but it is still very relevant to this discussion.
So are the politics causing the problem or are they reactions to it?
November 16, 2011 at 5:35 pm #145737
Here’s a bit on the Budget, budget deficits, and the pressures on government to deliver on promises and expectations.
November 16, 2011 at 5:45 pm #145735
Talking in some detail about where the money is going (entitlements, defense, interest, etc) and what might be done to control it:
November 16, 2011 at 5:57 pm #145733
Dealing with health care costs and efficiencies – the largest I.O.U. in the United States. This is controversial stuff, but it does open an important aspect of this discussion.
November 16, 2011 at 6:01 pm #145731
Taxes: a way to step into this side of the discussion. This is the last video in the series.
November 16, 2011 at 6:08 pm #145729
This video shows David Walker talking about the problem in detail. He traveled around the country for several months while we has the Comptroller General of the US and the Head of the GAO.
This will be central to the discussion going on in the Super Committee.
November 16, 2011 at 6:38 pm #145727
This is a very direct correlation between what’s going on (or not) within the Super Committee, but it is also the latest in a long string of events (like this article written in August of 2007) that demonstrate how precarious and frankly interconnected the world economies are.
November 16, 2011 at 7:53 pm #145725
Good insight here. So much of a healthy business environment is dependent on stability. Money needs some assurance that it will grow and come out of any given investment better off than what it was when it went in. If it doesn’t have those assurances, it tends to lie dormant.
November 16, 2011 at 7:56 pm #145723
That’s a great quote. Very entertaining. Of course, William F. Buckley was full of great quotes. 🙂
November 16, 2011 at 7:57 pm #145721
Wow.. this is a great insight into how this issue will affect you on a very tangible and local level. Thanks for sharing, Christopher!
November 16, 2011 at 8:04 pm #145719
That’s a good point. Across the board (ATB) cuts can be like using a broadsword to remove a splinter. Surely there would be unintended casualties if new controls were executed in that way.
Of course, there are some who might say that a cut across the board would be less damaging than taking no cuts whatsoever. How could the US get on with a speedy correction if they allowed local level control over the cuts? Wouldn’t local control authority slow things down? What do you think?
November 16, 2011 at 8:19 pm #145717
There is experience in these words. We’ve been through many similar situations. Good point, Peter.
Do you think the context in which those events happened (i.e. 1986 – which also produced the Tax Reform Act and one of the biggest shifts in wealth in the US) is the same as what we’re facing today, or has the environment changed at all since then?
November 16, 2011 at 8:43 pm #145715
There are many who are hoping that another great innovation will re-ignite the US economy – similar to the way the internet boom ignited the economy in the past. Many folks have gone on record saying that something along these lines – maybe a breakthrough in energy production or health care – would be just what the economy needs to start another run.
I wonder what permanent effect any innovation would have unless we change some of our underlying habits. Deficit spending is a road to disaster. We’ve seen that. Bad habits are not good for a healthy economy.
Even modest changes in government acquisition habits, the addition of coordinating mechanisms, or the application of standards across IT platforms would go a long way over time to reducing waste and contributing to a solution. Some of this stuff we can do in our own environment.
What do you think?
November 17, 2011 at 12:43 am #145713
I don’t think allowing some agency discretion would “slow” things down at all, especially considering that in one case they already built such flexibility in; and simply neglected to give it to everyone. All you’d have to do to greatly minimize impact to agency missions without “slowing things down” is to grant the same flexibility given to DoD (to increase cuts in some accounts / decrease cuts in other accounts in order to protect military personnel accounts) for military personnel accounts to DoD and all other agencies for civilian personnel accounts as well (and possibly for critical non-personnel accounts). I consider it the greatest travesty of the Budget Control Act that no flexibility was granted for civilian personnel accounts as was granted for military personnel accounts; and it’s going to leave a LOT of agencies–DoD included for that matter; as they do employ civilians–in a huge world of hurt that could have been avoided if such had been included in the law.
As for the impacts of such a tweak; there would be few to none: Agencies would still be required to hit their bottom-line numbers (just like DoD is still required to hit their bottom line #’s; if they choose to exercise their flexibility to protect military personnel accounts, they have increase the cuts to other accounts to make up the difference and reach the same $$$), nothing would really change–9 percent would still be 9 percent. But rather than having to hit a critical, personnel-intensive account by 9 percent and cause massive RIFs (to the detriment of both agency missions AND the unemployment #’s); you could, say, choose to take a 20 percent reduction in a capital account or a less-than-super-critical project account; and only a smaller, doable say 3 percent reduction in staff-intensive, mission-critical accounts. Or even if an agency were all staff intensive accounts; they could still choose to take larger reductions in less critical accounts to ensure only small reductions in the most critical ones.
November 17, 2011 at 12:49 am #145711
…I wasn’t around back then; but if I recall from listening to people who were, wasn’t the Graham, Rudmann, Hollings sequestration much smaller (only half the size?) in terms of percentages?
The current sequestration is predicted to equate to about 9 percent ATB for most agencies; I worry that a cut of such size would force agencies into a RIF situation, especially in personnel-intensive accounts or mission areas; which certainly WOULD have impacts, in some cases fairly severe ones. Do you remember the % # for Graham-Rudmann-Hollings; and if it forced agencies into RIF situations?
November 17, 2011 at 2:48 am #145709
Good points. 🙂
November 17, 2011 at 6:43 pm #145707
More evidence we’re in for something “hellish”
November 19, 2011 at 7:22 pm #145705
November 19, 2011 at 8:44 pm #145703
Thanks for posting, Stephen.
November 21, 2011 at 9:57 pm #145701
November 21, 2011 at 10:13 pm #145699
November 22, 2011 at 1:34 am #145697
As soon as I heard the ‘super committee’ was made of politicians I kinda suspected it’d fail. They’re more the ‘Epic Fail Committee’.
I think the most frustrating thing is, if we, the random ‘we’ underperformed like these folks have we’d all be out of a job.
November 22, 2011 at 1:17 pm #145695
Is there a silver lining? Could this have been the best possible scenario?
November 23, 2011 at 2:26 pm #145693
This just in from the Commercial Real Estate sector. Globe St says:
“WASHINGTON, DC-There are so many ramifications for the failure of Congress to reach agreement on a debt deal it is difficult to know where to begin. Continued gridlock and political animosity is a given for another year, leading up to the presidential election. Ditto a lack of leadership from Congress on the country’s economic problems. Many key tax issues will be left hanging, such as the payroll tax break that President Barack Obama had wanted to see extended for at least another year. Without an agreement from Congress, that is poised to expire at year’s end.”
November 23, 2011 at 3:03 pm #145691
President Obama makes a statement about the Supercommittee:
November 24, 2011 at 5:20 pm #145689
Term limits are clearly required.
November 27, 2011 at 6:36 pm #145687
At this time, they are deadlocked. For me and my little slice of DoD, DoN, means “hiring freeze indefinately”, the MARADMIN was out on that before the “Super Committee” had their first cup of coffee together. Wage freezes are going to continue from 2 yrs to 5 yrs. We have been told that “high 3” for retirement just may go to “high 5”. We, here in our little corner of the world are and have been doing more for less for quite some time now. We have been through an A-76 over ten yrs ago and have been running on an MEO until that ended 2 yrs ago. We are still operating with 3 less soon to be 4 employees as they retire. And that is just my organization, there are many here who are at “bare bones”. This is the “new normal” for us. I don’t believe anyone in DC has a clue what it is like beyond the beltway for this group of govie workers. Mass reductions in the USMC by about 20,000 will mean young men and women between the ages of 22 and 30 (most with families of children under the age of 7) will be looking for a job with little marketable skills. Why do you think the military is loaded with recruits when the economy is bad? Yeah, it’s a job that pays, let’s be real about it. We are so busy policing the rest of the world we are not concentrating on what is going on in our own backyard. There is nothing we can do for the Middle East anymore. It is clear they don’t want us there, and they dont’ want a Wallyworld and a MickeyD’s on every block. Pack up, go home, there is work to be done right here.
It’s time to close 1/2 the bases in Europe and put the military on both borders, north and south. Start looking at the TOP brass for cuts, not at the GS4 level. You don’t pull the foundation out first, then your whole building collapses. Geez louise, they need to grow a brain in DC. Stop all the frivolous spending. A govie does not need a gov supplied cell phone or smart pad any more than a fish needs a bicycle. You want office supplies, (calendars, pens, pencils, staplers), do what we had to do several years ago, buy our own. Teachers in the public school system do it all the time. Don’t ask us to procure hybrid, bio diesel and CnG gov fleet vehicles and then turn around ask us to provide top brass VIPs with a gas guzzling SuV at our organizations expense when you visit. Then go home to DC where SuV’s and a “driver” escort you all over DC. Clearly a case of “do as I say, not as I do”.
Illegal immigaration is pushing us over the edge, time to stem the tide. It seems Alabama and Arizona had to be the guinea pigs to do something. South Carolina is now working that way. The states have had enough and the feds are not going to, or are not able to help, so they took matters in their own hands.
No more loans to countries who have no intention of paying us back. No more farm subsidies, the buck stops here. Any surplus can be “sold” to overseas markets…….if need be. When my mother was a young girl in the 30’s & 40’s, train cars would dump surplus fruits and veggies in ditches in the south and spray them with poison so the local people wouldn’t take them. yeah, in America, it’s ridiculas….we let our own people go hungry. So farm subsidies were born and we have warehouses of stored food we can’t get to our own people. Then sell it. Why are we buying tomatoes from “Mexico”??? Anyone?? <hearing the sound of crickets>
Term limits, clearly is the way to go. You won’t do the job we voted to send you to do, we will replace you.
I knew they would be deadlocked. For me, it’s again, “the new normal”.
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