White House warns sequester will hurt middle class
For months, President Obama has been urging Congress to offset the $1.2 trillion in sweeping spending cuts set to kick in on March 1. Now, with just three weeks left to act, the White House is pressing the fact that these across-the-board cuts would hurt the constituency that every politicians cares about: the middle class.
The so-called "sequester" cuts, the White House said in a fact sheet today, "threaten thousands of jobs and the economic security of the middle class will take effect. There is no question that we need to cut the deficit, but the President believes it should be done in a balanced way that protects investments that the middle class relies on."
Instead of letting the cuts go into effect, Jason Furman, principal deputy director of the National Economic Council, told reporters today that the White House wants Congress "buy the time it needs" to work out a comprehensive deficit and debt reduction package that includes entitlement reform and tax reform.
"The whole goal of buying that time is not for the sake of buying time," he said. "It's for the sake of buying time to do something that's a lot bigger and a lot better than the sequester in terms of entitlement reform, tax reform, stabilizing our deficit and ultimately the goal being creating jobs and economic growth."
The fact sheet the White House released lays out the way certain agencies could be impacted by the sequester cuts, which would amount to $85 billion this year.
Around 70,000 children would lose Head Start and Early Start services, the White House says, while cuts to Title I education funds would be eliminated for more than 2,700 schools. Additionally, cuts to special education funding would eliminate federal support for more than 7,200 teachers, aides, and other staff.
Small businesses, which lawmakers cast as the lifeblood of job creation, would lose up to $540 million in loan guarantees from the Small Business Administration. Emergency unemployment benefits, meanwhile, would be cut by as much as 9.4 percent.
Cuts to the Mental Health Block Grant program would result in over 373,000 seriously mentally ill adults and seriously emotionally disturbed children not receiving needed mental health services, the White House says.
The fact sheet lists a number of agencies -- including the IRS, the FBI and FEMA -- that would be less equipped to assist people.
Furman said that the effects would be immediate in some agencies and more gradual in others. "So there's no easy answer to say what the world is going to look like on March 2nd," he said. "We just know that these impacts -- while not all of them immediate -- if we don't take action, they will take place."
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Did you actually ENJOY the last recession? Do you want another one?
ALL future federal spending cuts should be tied to an unemployment-rate trigger: for example, $50 billion in cuts (half Defense, half non-Defense discretionary) when the unemployment rate drops to 7%; another $50 billion (same split) when the rate drops to 6.5%; and so forth.
In the meantime, we could certainly eliminate some tax expenditures, like subsidies for the oil and gas industries, offshoring jobs and private jets. And, since there's absolutely NO economic justification for taxing capital gains, dividends, and "carried interest" at a lower rate than earned income, let's eliminate those wasteful tax dodges, too! And one nice thing about eliminating these 1% tax boondoggles is that the change will have only a tiny "headwind" effect on economic growth!
Let me make it even simpler: The ONLY reason we haven't been repeating the Great Depression (i.e., 25% unemployment) for the past five years is because we've been running deficits. The time to cut federal spending is when the economy is strong and unemployment is below 5%. Cutting federal spending BEFORE that point will simply put us back into recession (as it has Europe, and especially the United Kingdom). On the other hand, ending the GOP's insane tax giveaways to millionaires and billionaires will (slightly) shift our feed-the-rich tax system closer to rationality!
Do you have a clue?
http://www.nbcnews.com/business/whos-announced-most-job-cuts-uncle-sam-1C7100784
I don't agree with the magnitude of the austerity. We are not just like Greece. We don't want to follow the remedy that the EU just imposed. It has produced a massive slowing effect for 3 years.
The expiration of tax cuts widely would have been more effective than budget cuts. Both are needed and in each greater magnitude than $100B per year.
Nothing wrong with the sequestration. Nothing wrong with higher taxation. We do have to quit borrowing money to fight wars and to pay the normal bills.
But...it is not just a Democrat thing.
ALL future federal spending cuts should be tied to an unemployment-rate trigger: for example, $50 billion in cuts (half Defense, half non-Defense discretionary) when the unemployment rate drops to 7%; another $50 billion (same split) when the rate drops to 6.5%; and so forth.
In the meantime, we could certainly eliminate some tax expenditures, like subsidies for the oil and gas industries, offshoring jobs and private jets. And, since there's absolutely NO economic justification for taxing capital gains, dividends, and "carried interest" at a lower rate than earned income, let's eliminate those wasteful tax dodges, too! And one nice thing about eliminating these 1% tax boondoggles is that the change will have only a tiny "headwind" effect on economic growth!
It is also not as deep a cut as many would have you think. It is rather like the $400B/anumm in tax revenues that would have beem gathered if ALL the Bush tax cuts had expired (as they needed to). Yes, most would be affected. not drastically, but back to the same levels we were ALL paying in 2000.
Then they negotiated. $400B/year was too much, then $110B/year then $83B/year....now finally it is $60B/year (on a trillion dollar deficit) as agreed upon. Thus little or no effect, but STILL immense complaining atthe little bit more that we pay now that we WERE already paying before 2010.
Now onto spending cuts. THe $100B/year is too much or too little? Will it really affect the economy that much? The economy has been pretty stable for a year and 1/2. The stock market is SOARING....for no substantive reason. Yet, the pressure is to negotiate them downward.
I say let the sequester happen, then negotiate away from the more drastic effects. Give it a chance.
If the entire cliff had been left in place, the deficit would have been < $500B this year.
The poor live off the government.
The wealthy live well no matter what.
The middle class is the only class actually working........and paying the taxes that support the poor. So just call them the working class.......because they are going to get too poor, to qualify for the middle class label, anymore.