US - the effect of spending cuts

Suicide by Sequester: US Feels Pinch of Erratic Spending Cuts

The pain of the sequester has been bearable thus far, but that will soon change. This summer, thousands of Americans will suffer due to cuts triggered by the entrenched budgetary battle in Washington -- and the damage could last for generations.

By Sebastian Fischer and Sandra Sperber (video) in Washington

Spiegel,

26 January, 2013

Despite being only 32, Alicia Tolliver has had no shortage of tough breaks in life -- a teen pregnancy, dropping out of school, unemployment and homelessness. Eventually, though, she found a resource in Head Start, an American health and human services program for young low-income children and their families. For Tolliver, Head Start served as a motivational program as well. She went back to school, completed a training course and found a job.

But then things went downhill again. With the financial crisis came unemployment and the loss of her apartment and car. Again, Tolliver found salvation through Head Start, as she fought to keep things together for herself and her three children.

But then came the sequester.

"It's frustrating," Tolliver says. Once again, she's about to watch everything fall apart.

A sequester is a compulsory budget cut, the kind of idea only politicians could come up with. With the country deeply in debt and President Barack Obama and the Republicans unable to agree on how to make long-term budgetary cuts, the two factions cobbled together a ticking time bomb of austerity, set to go off in 2013. The idea was that these cuts would be so absurd that one side or the other would have to back off and yield ground in order to prevent the bomb from going off.

That's what the president thought would happen. That's what the Republicans thought would happen. It didn't.

Cutting with Wanton Abandon

The grace period expired on March 1 with no agreement reached, and since then the government has been cutting programs at random, lawn-mower style -- $85 billion (€66 billion) in spending cuts have to be made by the end of September, an amount roughly equal to the entire federal budget of Austria. In other words, within the space of half a year, the US needs to slash the equivalent of Austria from its budget. Hundreds of thousands of jobs are at stake. And if politicians in Washington still haven't reached an agreement by that point, the cuts will continue. The country is in danger of existing in a perpetual sequester, with another $1.2 trillion in budget reductions needed by 2021.

Since the effects of the first wave of cuts were hardly noticeable at first, many Americans have already almost forgotten about this bizarre construct called a "sequester." The TV broadcaster CBS recently conducted a survey asking Americans if they were affected by the sequester. More than two-thirds answered that they weren't. Now, though, as summer starts, the sequester is about to hit in earnest.

Secretary of Defense Chuck Hagel just announced 11 furlough days for around 650,000 civilian employees of his department. Federal law enforcement, disaster response teams, financial oversight, science and research -- all are experiencing cuts. Head Start, which is funded by the Department of Health and Human Services, will also be affected. Nationwide, about 70,000 of the approximately 1 million children currently enrolled in the program will no longer receive support from the program.

Those cuts will affect the Head Start Parent Child Center on 13th Street in Washington, where Alicia Tolliver takes her youngest daughter. Starting on July 1, 20 children will suddenly be left with "no nutritious meals, no benefits of seeing a doctor on-site, no dental services on-site," says Almeta Keys, the center's director. Keys has already been forced to consider which children she'll select to be removed from the program. Tolliver and her daughter, she says, will most likely have to go.

Keys considers the mandatory cuts absurd -- not only because they affect "the poorest of the poor," but also because cost-cutting today means more expenses tomorrow. "For every dollar Congress invests in Head Start," she says, "it's a $7 savings across the board on our local communities." Why? "Because fewer of these kids drop out of school, because their future health costs are lower, because we'll need fewer prisons."

Like Medieval Leeching

The absurdity of the cuts angers the people they affect. The US can undoubtedly see how Southern Europe is driving itself into the ground with its belt-tightening measures and how unemployment there is skyrocketing. But, here, the country is pulling its own plug. "Austerity, including sequestration, is the economic version of medieval leeching," wrote Jared Bernstein, former chief economic adviser to Vice President Joseph Biden, in the New York Times in early May. People in the Middle Ages believed a sick person needed to lose supposedly bad blood in order to regain health.

That, of course, was nonsense.

In fact, more than a few American economists advise investing rather than making cuts. Such investing could come in the form of the kinds of massive infrastructure projects that have traditionally been used to create jobs in times of economic slowdown. And, as can be seen by Thursday's collapse of a bridge on a highly trafficked interstate highway in Washington State, there's plenty of evidence that the US could use upgraded infrastructure. Looking at bridges alone, in its 2013 Report Card for America's Infrastructure, the American Society of Civil Engineers rated one out of nine of the country's over 600,000 bridges as "structurally deficient."

What's more, the federal deficit is already decreasing faster than expected. The independent statisticians at the Congressional Budget Office (CBO) expect new debt of $642 billion in 2013, around $200 billion less than had been predicted at the start of the year. And the International Monetary Fund (IMF) warns that the US shouldn't overdo it with budget cuts, with the country's unemployment rate still high, at 7.5 percent.

Alicia Tolliver recently organized a march of parents with strollers who converged on Congress in support of Head Start. There, Breeany, just five years old, read to members of Congress out of a children's book as an example of Head Start's accomplishments. It didn't help. Some of the program's centers have already had to close.

Other government programs, though, have fared better. For example, private donors have seen to it that the Yellowstone and Grand Teton national parks will be able to stay open all summer. And in other places, the lawn-mower method has been called off entirely. For example, Democrats and Republicans were suddenly very much in agreement on a decision to end air traffic controller furloughs. Lawmakers have given the Federal Aviation Administration more spending flexibility to cuts its budget, preventing long lines at airports.

"If we were the pilots who fly members of Congress home, maybe we wouldn't have had our funding cut either," says Keys, the Head Start center director.

Translated from the German by Ella Ornstein