The Sequester: How To Implement Cuts The Smart Way

The Gramm-Rudman Sequester (automatic fiscal budget cuts) in 1986 created lasting cuts in the federal budget, what’s happening these days are not cuts but reductions in the rate of spending.  The distinction isn’t dubious, but the chatter class isn’t interested in anything but demagoguery.  This post will lay out the working of the 2013 ‘Sequester’ even though nothings being cut.

Yes, the automatic spending cuts as an idea should be laid at the feet of Obama and Jack Lew at Treasury, for both men are the principal agents for the creation of this idea.  “Sequester” is a Socialist term who’s historical and philosophical pedagogy are found in Totalitarian ideologies where civil society doesn’t exist.  For the Titans of our age don’t permit any sphere of autonomy to exist outside the commanding heights of ideology.

Understand that a 5% rate of reduction (not a cut) in FY (fiscal year) 2013 should be measured against the rate of growth throughout the federal budget.  This means that since Obama became President, the rate of growth pertaining to the federal budget has grown 17% on average!  Note the distinctions!

When the 1986 Congress actually had a sequester, they, like good Keynesians, found legislative ways to bypass such “cuts” by devising new budgetary categories called PPA’s.  This stands for “projects, programs and activities/or/accounts.”  These budgetary categories would be subject to funding despite the 1986 Sequester.  Please note that the FY 3013 Sequester would concern the roughly 1,200 broader fiscal units called “budget accounts”, not PPA’s.  These are technical and juridical terms with real distinctions.  This must be kept in mind when the chatter class fails to distinguish how FY 2013 Sequester will be/should be implemented.  Despite the demagoguery coming from 1600 Pennsylvania Avenue, budget accounts, not PPA’s are supposed to be cut!

Let me explain that last sentence.

Congress most likely meant for PPA’s to be cut along with budget accounts, but they wrote a very sloppy law.  The 2011 Budget Control Act disinterred the lapsed sequester rules of the Gramm-Rudman Deficit Control Act of 1985 without looking at the details!!

The Gramm-Rudman 1986 Sequester applied to budget accounts, not PPA’s, but only while Congress was in a temporary “part year budget”.  As of March 2013 the govmint is operating under the same “continuing resolutions” now, Congress is not operating on a normal appropriations calendar.  This is why the GOP controlled House had demanded that the Democratically operated Senate make and bass a budget.

IF Congress returns to regular ORDER in FY 2014, the Sequester will hit PPA’s.

We should note that this White House has never permitted the Constitution to interfere with its political ambitions (remember Obamacare, immigration executive orders, recess appointments . . .)  We expect the White House to maintain its affected posture of fake outrage while questioning the legal stringency of the Sequester.  The White House knows that it can get some budgeteers in the House to formally construe budgetary accounts and PPA’s to shuffle money between departments.  We can also expect such budgeteers to lock in spending at post-Sequester levels and grant each Department transfer authority over grants.  This neatly fits the ideological compartmentalization that animates the administrative technocracy that animates the contemporary Democratic Party.  But it would not stand Constitutional muster given that we’re a Constitutional Republic.   After all, American liberals would love to possess and grow budgetary fiefdoms and transfer authority without political interference.

There’s a word for that:  Europe!

The good news is that the longer this goes on, the worse it gets for Obama.

The bad news is that neither the chatter class nor professional politicos are interested in either reforming govmint or the practical work of governing.

 

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About William Holland

Systematic Theologian/International Relations
This entry was posted in Budget, Economics and tagged , , , , , , , , , , . Bookmark the permalink.

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