Capitol Showdown: How do you feel the federal government handled the sequester?
It is time to put aside the hysteria and look at what sequestration really is, since several myths have dominated the debate over the so-called sequestration.
What is sequestration?
Sequestration or sequester is a term used to describe blunt and indiscriminate federal budget cuts that come to around 1.2 to 1.5 trillion dollars over the next 10 years.
Where did it come from?
The concept of the sequester came into being along with the super committee after the contentious debt ceiling deal of 2011. President Obama assigned the super committee, which consisted of Democrats and Republicans in the House and Senate, to come to an agreement on a better cost saving solution to avoid sequestration. However, the super committee failed.
What will be cut?
Nothing. The current debate about the sequestration and the “across the board cuts” that will devastate the world is ridiculous considering the sequester doesn’t cut federal spending at all. Rather, it is a modest growth reduction in the rate of spending by the federal government.
Moreover, there are no “across the board” cuts because entitlements are entirely exempt from sequestration. By leaving entitlements off the table, the sequestration cuts disproportionately target programs that aren’t the long-term drivers of our debt.
What you need to know about Sequestration:
The truth is sequestration is actually working—it is doing exactly what it was designed to do: cut spending when Washington simply doesn’t have the will. It is cutting from defense and from domestic spending, which neither side is willing to touch.
The bottom line is the government has a spending problem—not a revenue problem. Automatic spending cuts will hurt, but the truth is there is no way to correct Washington spending without paying.
– Alexis Gallagher, Towson College Republicans
The sequester is a result of the fiscal cliff negotiations and the 2012 Budget Control Act and refers to a set time where spending cuts from the Budget Control Act go into effect. The macro effect of the cliff is that government spending decreases, contracting the economy. This contraction could cause a second recession, commonly called a double-dip recession. However, because this is a bad outcome, there is still hope that Congress and the President can get together to make the reforms we need to avert the crisis and put the nation on a path to fiscal sustainability.
There are three ways to deal with the debt and deficit problem. The government could cut spending, raise revenues or do some combination of both. Obviously, the third option would yield the best results because it would not involve gutting essential programs or increasing wasteful spending. Recently, in the United Kingdom, the Conservative Party government fulfilled its quest to cut government spending and reduce their budget deficit. Because they did this, they are now dealing with the fallout of a double-dip recession. Clearly, this is not the same path that we should follow. There needs to be a balance.
There are plenty of sensible reforms that we can make to fix the debt problem. As a first step, we can raise taxes on the top two percent of Americans while keeping them low for the middle and working classes. The middle class is the largest spending block in the economy. If we allow them to keep the same tax cut, they will continue to spend, which provides a highly stimulating effect to the nation. Those in the top tax brackets do not spend like the middle class does. Instead, they tend to make investments oversees which sucks money out of the domestic economy. That money could be better used by the government to provide educational opportunities to young people, investing in research and technology, or lifting people out of poverty, thereby keeping America competitive long into the future.
A similar approach can and should be taken to responsibly reform entitlements (Social Security, Medicare, and Medicaid). Right now, every worker in the United States pays the same percentage of his income into the Social Security/Medicare system through the FICA/Med. tax, everyone, that is, except the wealthy. FICA/Med. is a capped tax, which means that if your income exceeds the cap, you do not have to pay the same percentage as everyone else. Why should we be thinking about cutting these programs, when someone who can afford to pay more is not required to do so? The cap should be abolished.
Republicans in Congress, however, are not so wise. They continually attempt to dismantle programs like Social Security, Medicare, and Medicaid and protect tax cuts for the wealthy instead of making sensible reforms to these programs that will make them solvent while keeping America competitive for the 21st century.
– Matt Sanford, College Democrats of Towson