- - Thursday, November 14, 2013


Have the federal budget cuts caused by sequestration had any impact on your personal life? How about the 16-day, partial government shutdown?

Despite all of the handwringing here in Washington and President Obama’s hysterical warnings of fiscal and social upheaval, economic pain and deprivation, relatively few Americans said these spending cuts had an impact in their daily lives, according to surveys.

The government’s so-called essential services were not affected in any significant way. The economy grew, albeit very slowly, but it was growing slowly before sequestration and the shutdown.

The country went about its business. The stock market rose to new heights, untroubled by the spending cuts, and earnings rose for many corporations, boosting their equity values, which in turn benefited millions of 401(k) retirement plans for America’s workers.

Furloughed federal employees got paid for their time off. The economy continued to create more jobs, though at its same old, persistently sluggish pace.

You will recall that the automatic sequestration came about in the Budget Control Act of 2011, which took effect in March 1, 2013. It called for $85.4 billion in annual reductions; that worked out to $42 billion in actual cash savings.

To the average American, that sounds like a lot of money — and it is — but relatively, it’s a thimbleful compared with a $3.6 trillion federal spending budget that is racing toward $4 trillion during the next couple of years.

The sequestration cuts didn’t touch programs such as Social Security and Medicaid, or federal pay rates, including the military.

House and Senate budget leaders are meeting to find a compromise on a long-term budget that could repeal sequestration. If they fail, though, sequestration will remain, reducing expenditures over the coming years.

Right now, the automatic cuts are on track to significantly shrink deficits by about $1 trillion over the next eight years.

Sequestration critics say this is a bad way to curb spending because it is indiscriminate in its targets. Good programs get cut, while bad programs that should be slashed deeply or abolished, survive with their accounts mostly intact.

Still, sequestration has, by all accounts, been an effective budget-cutting weapon at a time when Congress has been unable to agree on a slimmer budget, or at least one that Mr. Obama, who worships at the altar of Big Government, will sign. Don’t bet on that happening.

According to the Congressional Budget Office, for the first 11 months in this fiscal year, total federal outlays were down by $127 billion. OK, that’s not nearly enough to get us to a balanced budget, but it’s not chopped liver, either. Thanks to sequestration, spending is being cut, and for the first time since the end of the Korean War, it has declined two years in a row.

That’s what the automatic cuts have achieved, with relatively few Americans noticing much, if any, impact in their lives. It’s only a start, though, and very modest one. The budget is still on an unsustainable path.

If Congress doesn’t change its spending habits, and do so soon, the mushrooming federal debt — the largest since World War II — will reach 100 percent of gross domestic product in 25 years. In other words, we will owe more debt than the size of our entire economy.

The special joint committee, formed in October under a deal by Congress to end the government shutdown, has until Dec. 13 to come up with a compromise budget. It remains to be seen whether an agreement can be reached, let alone pass the House and the Senate.

Certainly, there are plenty of places where big budget cuts can be made, and few Americans would notice. Let’s start with Mr. Obama’s $90 billion green-energy slush fund that has doled out money to a number of companies that have gone bankrupt, leaving taxpayers holding the bag full of bad loans and grants. Many of the recipients of this money were big contributors to his campaign.

An estimated 50 energy companies bankrolled by the Obama regime went broke or are now in financial distress. Mr. Obama says his pet program will continue no matter how much money it is losing. The liberal Brookings Institution says the administration will spend more than $150 billion on energy boondoggles such as this one if the program continues.

The Department of Agriculture dishes out billions of dollars in farm subsidies, much of it to wealthy farmers or to rich investors who owned companies that received such subsidies. The Environmental Working Group, a Washington-based research outfit, recently reported the government shelled out $11.3 million in taxpayer subsidies from 1995 to 2012 to 50 billionaires or businesses that owned an interest in large farming enterprises. These recipients included Microsoft co-founder Paul G. Allen, investment tycoon Charles Schwab, and S. Truett Cathy, who owns fast-food chain Chick-fil-A.

“The billionaires who got the subsidies have a collective net worth of $316 billion, according to Forbes magazine,” The New York Times reported.

The Department of Housing and Urban Development’s Community Development Block Grant program has spent tens of billions of dollars in upscale, wealthy communities that do not meet the minimum test of need.

A typical example of this program’s wasteful spending was exposed by Sen. Tom Coburn, Oklahoma Republican, in his annual Waste Book: A New Hampshire beer brewing company “is still getting a $750,970 … grant to build a new brewery and restaurant facilities.”

The government is awash in similarly wasteful federal spending, not to mention hundreds of billions of dollars in widespread fraud, abuse and other forms of rampant fiscal skullduggery. It’s a tawdry business Mr. Obama never discusses because he is one of its most enthusiastic practitioners.

Donald Lambro is a syndicated columnist and contributor to The Washington Times.

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