Friday, March 8, 2013
The Social Contract: A brief history and my perspective
Wednesday, March 6, 2013
Campaign Finance Reform
Tuesday, March 5, 2013
Sequestration: The What, Why, and How
A lot of people have asked me this weekend about the sequestration: what it is, what it means, and what's going to happen.
First, what is sequestration? A lot of terms have been thrown around regarding the fiscal health and viability of our economy. The term sequestration may not seem to make sense, and in ways, it’s a misnomer. However, the sequestration is actually the mechanism by which the results are accomplished, not a mechanism of Congress but a mechanism of the Treasury.
Let's start from the beginning. Sequestration originated in the 1980's, during Ronald Reagan's Administration. With skyrocketing expenditures on the military, and a goal of cutting taxes for Americans, the deficits were growing exponentially. In order to reign in these deficits, and the debt that they were created, Congress passed the Balanced Budget and Emergency Deficit Control Act of 1985 otherwise known as the Gramm–Rudman–Hollings Act. It created automatic spending cuts if the deficits exceeded targeted levels. The way that spending was cut is that the Treasury sequestered, that is retained or refused to release, part of the funds budgeted to the different agencies. Thus, the term ‘sequester’. The GRH Act was found unconstitutional in Bowsher v. Synar a year later. The Act was reworked by Congress the following session, but it never really reduced deficits.
In 1990, the Budget Enforcement Act and the Omnibus Budget Reconciliation Act supplanted the reworked GRH Act. From 1990 until 2002, the government operated under a PAYGO system. This meant that any new expenditure had to be matched with cuts elsewhere or new revenue gained. In 2002, the PAYGO statute expired and in 2003 Congress passed President Bush's tax cuts. PAYGO was later reinstituted as a standing rule of the house, which doesn't have the force of law but is considered a suggestion to law makers. The PAYGO policy lasted less than a year. However, in 2010, PAYGO was signed back into law, making it mandatory again.
The new round of sequestration arises out of the Budget Battle in 2011. If you can remember back to the summer of 2011, the US government was approaching another cliff. We were running out of credit and the debt ceiling had to be raised or the US would start defaulting on necessary expenditures. The Republicans in Congress refused to raise the debt ceiling without drastic cuts in spending to help reduce the deficit. Specifically, the cuts they wanted were to come from domestic spending. The Democrats refused to make those cuts. The agreement that was struck had long term consequences. First, the debt ceiling was raised immediately. Incremental increases were also allowed, with Congressional approval. Some cuts were made immediately, but a Joint Committee would also be formed to create a plan for the remaining spending cuts. The sequester was included as a motivation to come to an agreement.
via WashingtonPost.com
Then came December of 2012: the fiscal cliff. The Committee hadn't come up with an agreement and the time was coming. The sequester was on the horizon. A last minute deal, on New Year’s Eve, was struck. The Bush Tax cuts and some additional tax cuts were allowed to expire. The sequestration was put off until March 1, giving the Joint Committee additional time. That brings us to the present.
The Joint Committee failed. The President and Democrats refused to budge on their demands: Tax breaks only for those under $250,000 matched with reduced cuts on domestic spending and greater cuts elsewhere. The Republicans wanted tax breaks for everyone and greater cuts to domestic spending. Since no agreement was reached, on March 1st the sequestration, which was originally offered as a “nuclear option” to encourage agreement, went into effect.
So what is the sequester? The sequester is an across the board cut in spending programs. $1.2 trillion in cuts over 10 years. In reality, there will be cuts of about $984 billion- the remainder will come from debt interest savings. We divide that total by nine, the number of years it is in effect to come to a total of $109 billion a year. Now the fiscal year begins in September, so for 2013 there need to be $12 billion in cuts per month. Since the deal was made delaying the sequester until March- the cuts for fiscal 2013 will need to be about $85 billion dollars.
These cuts will come evenly from discretionary spending (for the most part, non-discretionary spending will not be cut). Half of the cuts will come from defense spending and half from domestic spending. Domestic spending is divided into Medicare and everything else. Medicare will see cuts of 2% across the board. This means that providers will bill as usual but will be reimbursed at .98 cents on the dollar.
All other agencies/budget accounts will be cut evenly. This is a very stupid way to make budget cuts. Everyone can agree that some budget accounts are more important than others. In lean times, such as these, cuts can be made to non-essential budget items and leave funds for others. To me, there are some things that should be considered essential: programs which provide food and health care to low-to-no income households and the elderly, first responders, and air traffic controllers for example. These cuts will be drastic and in effect until the new fiscal year in September, once we’ve reached a new budgeting year, Congress will be able to play with the numbers and make the cuts less drastic, while retaining “flat” cuts across all spending.
To give you an example: If you were part of a group experiencing a food shortage, you wouldn’t necessarily decide to cut the rations for everyone equally. Sure, that may be the “fair” thing to do, but you have to realize the relative importance of different members of the group. Those who are scavenging, foraging, or tending crops- things which bring in additional food- need energy to continue working. Some tasks can be left undone and those people can conserve energy and be given smaller rations. Those programs that do much needed work, the difference between survival and non-survival to some, need to have limited cuts while others can be cut more and not feel it in the same way.
The important thing to remember is the same thing I have always stressed, will stress on this blog, and is a major focus of my book: we have to keep in mind that in a modern society- EVERYTHING is interconnected. Let’s take one example: The Norfolk Shipyards. The men and women who work there are all civilian employees of the Department of Defense. They are part of the 800,000 workers who could get furlough notices. Their paychecks and family budgets are obviously affected, but it doesn’t end there. Since they are not working, the businesses around the shipyard, set up to serve the workers are going to suffer and some will close. Those folks, now out of work too, will buy less goods and services and other businesses in Norfolk will close. We have seen this before and the result is completely predictable.
The BRAC Commission (Base Realignment and Closure Commission) has spent the two decades since the end of the Cold War closing bases and moving units to consolidate and save money. If you were to go to towns that lost their military base 2 years ago, you will find a community on the brink. If you go to towns that lost their base 5, 10 or 15 years ago- you will find ghost towns; communities that are a shell of their former selves. When the base; and the men, women, and families who served there; left, everything in the town closed down. We are going to start seeing this all over the country as a result of the sequestration.
More broadly, we have an economy on the brink. True, based on economic principles, we are no longer in a recession. We’ve had positive, but slow, growth over the last few quarters. But our economy has not restabilized. We felt a shudder when the tax cuts expired at New Years. Most of you probably noticed less money in your checks in January than there was in December. Now, another $85 billion is going to be taken out of the economy. With reductions in programs for the no-to-low income level people, there will be even less money spent on non-essentials. Inevitably, this will mean more economic shrinkage and destabilization.
On 1 March, my facebook status said “Happy Fiscal Cliff/Sequestration Day! Here's to the end of America as we know it.” We are on the brink of losing our country, possibly for good. And for what? To force the pending tax cuts to be applied to everyone, even those who make over $250,000 a year and to force spending cuts on domestic programs.
But it’s not too late. The Sequestration can be “undone” if Congress can strike a deal at any time, but that doesn’t seem likely.
I’m linking to a video below about other effects of the Sequestration, and a comment from Speaker Boehner from when this deal was first struck back in 2011- that he got “98% of what he wanted. Apparently, this is what he, and the Republicans, really wanted.
Please comment below, and let me know what you think. Also, like/share on facebook and twitter. Look for more updates in the coming weeks. © Robert Cheek, 2013
Sunday, February 24, 2013
An Introduction... A Call to Action
In Shakespeare’s Hamlet, Marcellus, a royal guard, says the line above to Horatio. Similarly, the historian Suetonius recorded the Roman Emperor Nero was responsible for a fire that burned the capital city of Rome and that he watched it from a tower while playing a ‘fiddle’ and singing about the destruction of Troy.
It is clear to me, as I hope it is to any who read these words that the sentiments of Shakespeare and Suetonius ring true for modern day America. There is something rotten in the very heart of this great republic, and our leaders stand by heming and hawing, but not making things better- they stand by as the very state and its people waste away. To me, this is unacceptable.
So this is my answer. A blog- as small an answer as one could imagine. But I want to get my ideas out there. I want someone to start talking about the truth, rather than an angle or spouting rhetoric, and real solutions instead of quick fixes. The story of America is one of a refusal to be written off and a body politic that will rise up to effect change before being cast into the night. I hope to invoke some of the spirit of my idealism out into the world and have it taken up by someone or many who can start thinking and then, start acting.
First, let me lay out my qualifications for making judgments. I have been a student of political science, history, and law for 13 years. I have a B.S. in Political Science from Hofstra University where I graduated Magna Cum Laude. I focused on domestic policy with a minor in Middle Eastern history. I had advanced studies is social policy and the history of social movements in the United States. I have a Juris Doctorate from the University of Baltimore School of Law where I graduated Cum Laude after beginning my studies at Hofstra University School of Law. In 2006, I ran for the Maryland House of Delegates from District 37B. In 2010, I managed the campaign of a State Senate candidate from District 37. I volunteered for the 2004 Kerry campaign and the 2008 Obama campaign. I have had numerous internship opportunities including with Kenneth Schisler and Richard Colburn, and a semester with the Committee for Education Funding. I had worked and interned at all levels of government: federal, state, and local. I have studied extensively on my own time on a plethora of topics and have spent the last 10 years preparing my treatise on reforming the American government and system. I feel confident in saying I know what I am talking about and what follows is the result of all of my experience and knowledge in politics and government.
This blog will be wide ranging. I will address topics of my book in depth, I will address developing news stories, I will cover general civics and government lessons that I think all should be aware of, and as things progress, I will also recommend books and movies which I have read or seen, and I think others should read or see. I will try to give a fair and balanced critique, but I will of course be coming from my own progressive leanings.
All writings hereafter are the intellectual property of myself, unless otherwise acknowledged, they are copyrighted, and all rights are reserved for myself. For use outside of direct, accredited quotation, please contact me.
I want to stress this above all else: We have problems, that is certain. But no one, least of all me, is saying its time to give up. Let's acknowledge those problems and address them so we can move on. I still believe we can turn it all around and achieve true greatness again.