Why the Sequester Is Working

It's 1893.

My great grandparents, after years of suffering persecution and hardships at the hands of the Cossacks in central Russia, gather all their belongings and, knowing no English and fearing for their lives, journey thousands of miles from their homeland to the United States. It's 1933 and my grandfather, suffering from the great depression, destitute and living in New York resorts to theft in order to feed his family. It's 1943 and that same grandfather is forced to leave his family by the government, drafted into the army, and faces death daily on the battlefields of Europe. It's 1973 and my parents, now trying to figure out how to live without gas and under high inflation, are still smarting from the memories of surviving the Cuban Missile Crisis, assassinations of presidents and civil rights leaders, race riots and an unwanted war that threatens to involve them and their children.

It's 2013 and I'm upset because my flight out of Atlanta is 45 minutes late due to government budget cuts. Oh, poor me!

Our budget is running deficits of a trillion dollars a year. Our national debt now exceeds the entire annual output of our country and is approaching Greek and Spanish levels. The spending by our government, as a percentage of our Gross Domestic Product, is at an historical high and is forecast to more than double in the next 20 years. We potentially face riots, deep austerity, high interest and political upheaval like many of our friends in Europe are now experiencing. So to get things in order, our leaders through the wisdom of their own incompetence, have forced themselves into cutting government expenditures (not cutting the rate of growth mind you, but actually and really cutting) by about 2.5 percent this year in order to at least attempt to bring spending under control. And my generation, my lazy, over-privileged, self-indulgent, narcissist generation, whines and moans about the sacrifices. Waaaaah!

No! We say. We cannot have flight delays at our airports! We cannot wait an extra hour to pass immigration! We must not see our beloved National Parks close for a few days! I cannot be forced to call the IRS tomorrow when I need my answer today! This is an outrage!

Actually: the sequester, which went into effect on March 1, is reality. And believe it or not, it's working too. It is forcing our government to make hard choices and, like generations before, we are being asked to make sacrifices. And this is a good thing. Why?

A Genuine Decrease

For starters, it's a genuine decrease in spending. We've had talks about the balanced budget amendment, super-committees of Congressmen, late-night discussions at the White House and nationally televised presidential debates. No one has come up with that elusive "grand bargain" and, given the current polarized state in Washington, it's unlikely we'll achieve that agreement at least in the next few years. But our leaders did have the foresight to require budget cuts if nothing else could be agreed on. And so they're now happening. And we're all learning what it's like to live in a world where the government is actually spending less money each year, instead of piling on the debt.

It's Perfectly Imperfect

The sequester is not perfect, which is exactly how it should be. When originally implemented, the law said that $1.2 trillion would need to be cut equally between parts of the government over a 10 year period. This was the fair thing at the time and necessary to get the bill passed. But of course that's not perfect. You can't equally spread the pain because there are some areas that can be cut more and some that should be preserved. So now, two months into sequestration, we're discovering the effects of the imperfections within this bill.

What kinds of imperfections? For example, the FAA's decision to furlough air traffic controllers came under intense scrutiny last week. A disruption of air travel was determined to not only be an inconvenience but had potential negative effects on business and commerce. We also learned recently that many cancer centers are turning away patients because their Medicare funding has been cut due to the new law. Various federal departments, like the IRS, labor and park service, all announced that they would be forced to furlough their employees and suspend or limit services for certain periods of time. Education programs like Head Start have also lost funding.

And, like any business owner who makes decisions and is unhappy with some of the results, the government is itself making adjustments. They are hearing the cries of the public and the media and they are taking action. For example, a measure signed March 27 by President Obama gave some agencies flexibility in applying cuts, allowing departments like Agriculture to avoid furloughs of meat plant inspectors. To resolve the airline crisis, for example, Congress passed a law that enabled the FAA to use other funds set aside for grants to pay their air traffic controllers. This is a temporary fix for this year of course, but it's a start.

Making Us Choose... And Innovate

The great news is that we now have sequestration, which means we're doing something (however little) to get our deficits under control. But the amount of cuts is not as important as the change in national attitude. The big question is not should we cut expenses, but which expenses should be cut. So now our government is forced into making the kinds of choices that business people have to make every day. Should we fund the FAA or allocate those funds to cancer treatment centers? Is our national defense more or less important than keeping the Liberty Bell open year around? Do we forfeit jobs at that military base that's closing or instead fund Head Start education programs for another couple of years?

I don't know the answer to these questions. I have opinions. Everyone does. Everyone has their priorities and preferences. So now we, as a country and though our elected officials, must make choices. We have to determine what's more important. We can't have it all. We can't afford it all. This is painful. This is difficult. This is business. And this is a government doing what it has to do.

This exercise in sequestration is a great thing. It's forcing our government, from top to bottom, to be better. The FAA got a reprieve this year, but still faces cuts in the future. And they now know the public outcry that they will face if they cut the wrong services or fire the wrong people. The managers at the FAA are now forced into being more innovative and figuring out how to run their agency effectively with a little less sugar from sugar-daddy. The Department of Defense will have to do the same. And so will other departments in our government. These cuts are not devastating. They are mostly in the range of 2-5%. But they are certainly enough to force our elected officials and the bureaucrats who they've appointed into doing their jobs better and using my money, as a taxpayer, more effectively.

Is sequestration the way government should be doing business? It's exactly the way government should be doing business. Can the process be made better? No. It's perfectly imperfect. No business person would find that unusual.

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