Iowa Senator Tom Harkin Issues Report on Sequestration Impact on Nondefense Spending

From Eric Wasson at The Hill:

Download the report:

   Under Threat: Sequestration's Impact on Nondefense Jobs and Services (2.9Mb)

Foreword

Under the Budget Control Act, most Federal programs face an across-the-board cut in January 2013 if Congress does not enact a plan before then to reduce the national debt by $1.2 trillion.

So far, we’ve heard a great deal about sequestration’s effects on Pentagon spending. The defense industry has highlighted the potential impact of an across-the-board cut on defense-related jobs and services. Some members of Congress are now demanding that we exempt the Pentagon from sequestration, either by finding offsets for the defense cuts only or by making nondefense programs bear the full brunt of the entire $1.2 trillion in cuts.

But sequestration wouldn’t apply only to defense. It would also have destructive impacts on the whole array of Federal activities that promote and protect the middle class in this country – everything from education to job training, medical research, child care, worker safety, food safety, national parks, border security and safe air travel. These essential government services directly touch every family in America, and they will be subject to deep, arbitrary cuts under sequestration.

Some members of Congress warn that defense contracting firms will lay off employees if sequestration goes into effect. They say nothing of the tens of thousands of teachers, police officers, and other public servants in communities all across America who would also lose their jobs. A laid-off teacher is just as unemployed as a laid-off defense contractor.

In fact, the economic effects of cuts to nondefense programs could be worse than cuts to Pentagon spending. A December 2011 study found that investing $1 billion in health care or education creates significantly more jobs within the U.S. economy than spending $1 billion on the military. In health care, the difference is 54 percent more jobs; in education, 138 percent. A July 2012 study commissioned by the Aerospace Industries Association found that sequestration’s cuts to nondefense spending would reduce the U.S. gross domestic product during fiscal years 2012-21 by a greater amount ($77.3 billion) than cuts to defense spending ($72.1 billion).

So it’s important to have an accurate assessment of the potential impact of sequestration on the nondefense side of the budget. To that end, this report provides a detailed, State-level analysis of sequestration’s effects on dozens of education, health and labor programs under the jurisdiction of my subcommittee in fiscal year 2013. Among the highlights:

• States and local communities would lose $2.7 billion in Federal funding for just three critical education programs alone – Title I, special education State grants, and Head Start – that serve a combined 30.7 million children. Nationwide, these cuts would force 46,349 employees to either lose their jobs or rely on cash-strapped States and localities to pick up their salaries instead.
• In health, 659,476 fewer people would be tested for HIV, 48,845 fewer women would be screened for cancer; and 211,958 fewer children be vaccinated.
• At a time when the unemployment rate is still above 8 percent, 1.6 million fewer adults, dislocated workers and at-risk youth would receive job training, education and employment services; and the families of 80,000 fewer children would receive child care subsidies, making it harder for parents to find work.
• In Iowa, the State I represent, 4,677 fewer people would be admitted to substance abuse treatment programs, 496 fewer veterans would receive employment assistance, and 1,588 fewer students would receive Federal Work Study financial aid. Similar data are available for other States.

This report explains why my Democratic colleagues and I adamantly oppose any unbalanced approach that protects the Pentagon and the wealthiest 2 percent in our society while ignoring cuts to nondefense services, including education, that are so critical to the middle class.

Nondefense discretionary (NDD) spending already has absorbed significant reductions through the 10-year spending caps in the Budget Control Act and other measures. By 2021, this category of spending will account for just 2.8 percent of the U.S. gross domestic product, its lowest level in more than 50 years. Today, NDD programs comprise about one-sixth of the Federal budget. It defies not only reason, but also fairness and equality, to suggest that we can erase our national debt by slashing critical priorities like education and medical research while holding Pentagon spending harmless and expecting the wealthiest among us to sacrifice nothing.

A better, fairer solution is needed. It’s the same way we solved our previous budget crises in 1982, 1984, 1990, 1993 – with a balanced approach that includes both spending reductions and new revenue. In the five years following the 1993 deficit-reduction law, the U.S. economy created over 15 million new jobs; not only did we balance the budget, we were on course to completely eliminate the national debt within a decade. We can repeat this success. We don’t have to reinvent the wheel.

I hope this report will motivate members of both parties to embrace a spirit of compromise. The time for ideological posturing is past. We all agree that sequestration would be tremendously destructive. We all want to avoid it. That means we all must come together with good will to hammer out a balanced agreement that will not only prevent sequestration, but reduce our deficit and protect America’s families.

Senator Tom Harkin, Chairman
Senate Appropriations Subcommittee on Labor, Health and Human Services, and Education, and Related Agencies