Just to make things as complicated as possible around here at ground zero sequester-land:
–we call automatic spending cuts “sequestration;”
–we note that $85 billion will be cut in 2013, but we’re talking about fiscal year (FY) 2013, not the calendar year (CY) that normal people work off of (FY2013 goes from Oct 2012-Sept 2013);
–we note that the $85 billion is “budget authority” or BA—the amount of cuts prescribed in the legislation—but the actual FY13 cuts—the reduced outlays—are, according to CBO, $44 billion;
Various folks throw around this $44 billion as if it’s chickenfeed and won’t matter. But two things. First, if you want to estimate the decline in outlays in CY2013, you have to add 25% of the FY2014 outlay reductions to the FY2013 ones, which amounts to $66 billion in reduced outlays, CY2013.
Second, the negative economic impacts—loss of about 0.5% of GDP and hundreds of thousands of jobs—come from modeling reductions in outlays, not BA. So they’re not diminished when you cite the $44bn number.
Finally, things you thought were exempt from the boneheaded sequester turn out not to be fully exempted. From ThinkProgress:
Among the programs that will face cuts is the federal unemployment insurance program. While the part of the program that benefits the unemployed by providing grants to states is exempt from the cuts, the extended benefits signed into law at the start of the Great Recession are not. Extended benefits provide aid to workers who have been unemployed longer than 26 weeks, when most states end their programs. The budget cuts will reduce those benefits, which average roughly $300 a week for the program’s 3.8 million recipients. CNN reports:
The forced spending cuts scheduled to take effect next month trim the program’s funding. Recipients of those payments could lose an average of more than $400 in benefits each through the end of the federal fiscal year, according to the Department of Labor.
OK–I’m sure that clears up everything–except for why we’re about to do this in the first place. Now that’s really complicated…