I had an early version of this post
that did not properly consider all of the data available. Suffice it to say that the sequester is
complicated. My conclusions are the
same. The National debt stands at $16
trillion. The interest on this is approaching $800 billion. The current annual debt is about $1.2
trillion. If we do not cut spending, we soon will be borrowing just to
pay the interest. The sequester is a very small step toward a long
journey. Is this a problem this
year? No, we can get through this. Is it a problem in 10 years, almost certainly. Change needs to be made on the spending side
as well as on the revenue side. Sooner is better than later. Neither the President nor the Congress
gets this.
Thursday, March 14, 2013
Sunday, March 3, 2013
Sequestration Does Not Mean the Sky is Falling
After digging deeper into the sequester, I found several issues in my earlier post that may have been inaccurate. Mostly I was looking at an obsolete OMB report on the sequester that had $109 billion in sequestration funds for 2013. The American Taxpayer Relief Act reduced the 2013 effects of sequester by $24 billion leading to the much reported $85 billion. Regardless, I am still trying to square the DOD discretionary funding with the caps in the budget control act. Because of this, I took down the earlier post and will update it and republish soon. There is no point in having incorrect data out there. The effects of trimming $85 billion from a $3,200 billion budget is still negligible but the details of these posts should be accurate.
There are actually three OMB (Office of Management and Budget) documents that clarify or muddy this issue.
The first one is undated and was published sometime in 2011, I think. It is the least clear:
The next one, published last September, outlines a different scenario and suggests only a modest impact to the budget. http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/sequestration/sequestration_update_august2012.pdf
The final one was published by OMB last Friday: http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/fy13ombjcsequestrationreport.pdf
All of these OMB memos and reports are even more obtuse than the law enacting the sequester itself. The OMB reports, especially the first one , give a deeper insight to the budget process. View the law at: http://www.gpo.gov/fdsys/pkg/PLAW-112publ25/pdf/PLAW-112publ25.pdf.
The defense budget for 2013 is still at: http://comptroller.defense.gov/defbudget/fy2013/FY13_Green_Book.pdf
There are actually three OMB (Office of Management and Budget) documents that clarify or muddy this issue.
The first one is undated and was published sometime in 2011, I think. It is the least clear:
The next one, published last September, outlines a different scenario and suggests only a modest impact to the budget. http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/sequestration/sequestration_update_august2012.pdf
The final one was published by OMB last Friday: http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/fy13ombjcsequestrationreport.pdf
All of these OMB memos and reports are even more obtuse than the law enacting the sequester itself. The OMB reports, especially the first one , give a deeper insight to the budget process. View the law at: http://www.gpo.gov/fdsys/pkg/PLAW-112publ25/pdf/PLAW-112publ25.pdf.
The defense budget for 2013 is still at: http://comptroller.defense.gov/defbudget/fy2013/FY13_Green_Book.pdf
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