Sequester 2013 By Numbers

The United Methodist Church, Paragraph 163, says that "we recognize the responsibility of governments to develop and implement sound fiscal and monetary policies." I imagine most of us agree with that statement. The current debate regarding sequester deserves some attention from us as citizens. It is a rather borning numbers game. I will keep it brief.

The sequester was the result of an actual law - the Budget Control Act of 2011, now known as Public Law 112-25. A bill becomes law (in most cases, including this one) when it is passed by the House and Senate then signed by the President of the United States. It does not matter whose idea it was first. As law, it is the idea of Senate, House, and President.

According to Larry Kudlow, the $85 billion "spending cut" is actually budget authority, not budget outlays. According to the CBO, budget outlays will come down by $44 billion, or one quarter of 1 percent of GDP (GDP is $15.8 trillion). What’s more, that $44 billion outlay reduction is only 1.25 percent of the $3.6 trillion government budget. Further, these "cuts" come off a rising budget baseline in most cases. So the sequester would slow the growth of spending. They’re not real cuts in the level of spending.

From Dick Morris: Concerning sequester and the military, Defense spending, as a percent of federal revenue, has been relatively constant, however. It peaked at 29 percent during the Reagan Cold War era and then dropped to 23 percent as George H.W. Bush wound down spending. In 2000, after the Clinton years, it absorbed 18 percent of the budget, swelling to 20 percent under George W. Bush and returning to 19 percent in 2012. The additional $40 billion in sequester cuts will drop its share to 18 percent -- hardly cause for alarm.

Jonah Goldberg says that if the sequester goes into effect, the federal budget for this year will still be larger than last year's ($3.553 trillion in 2013 vs. $3.538 trillion in 2012). With the sequester in effect, federal non-defense spending will still be 10 percent higher than it was in 2008.

The point is simple. The sequester does not come close to the type of setting of spending priorities that the politicians need to make. It does not mean the sky will fall if it goes into effect. Such language assumes that the level of spending the federal government has now is efficient and well spent. Saying that makes most of us realize how silly the entire discussion actually is. In fact, what needs to happen are real cuts in budget outlays, and they need to occur sooner rather than later. That would appear to be "sound fiscal" policy.