It is clear to me that sequestration
and furloughs should end immediately for several reasons.
1.
The FY 2013 deficit will be much lower than
projected. The April federal budget
numbers are in and the federal revenue collected in April 2013 was $407B, which
was a substantial increase of 28%
compared to April 2012. As a result, the
revised deficit for 2013 should be about $200B less than the original forecast. Since sequestration was projected to save
$85B, it appears that tax collections this year have more than made up the
required savings of sequestration.
Below
is a table of federal revenue and expenses for Fiscal Year (FY) 2013 from
October, 2012 through April, 2013 in billions of dollars:
FY 2012
|
FY 2013
|
$ Change
|
% Change
|
|
Revenue
|
1,383
|
1,603
|
220
|
15.9%
|
Expenses
|
2,103
|
2,092
|
(11)
|
-0.5%
|
Deficit
|
(720)
|
(489)
|
231
|
-32.1%
|
2.
Government furloughs will affect service to
the public and could cause security risks.
We saw the impacts that temporary furloughs of Air Traffic Controllers
had on air travel. Meanwhile, many
military leaders are concerned that sequestration will limit military training
exercises and reduce military effectiveness.
3.
Furloughs could affect the national economy
and GDP with hundreds of thousands of civilians facing a cut in pay. In addition, some local economies that are closely
tied to government spending could be severely impacted by furloughs.
4.
Many federal government agencies have completely
curtailed training, which I believe will have long-term impacts on government
efficiency. As a former government
official, I have seen first-hand the benefits of training on an employee’s
effectiveness, morale, and dedication to government service. Conversely, I have seen negative impacts when
training is eliminated. In an
ever-changing world, untrained employees will fall behind the technical and
marketable skills required for an effective workforce. Some agencies already have problems with huge
backlogs and some are using 20th century processes.
What about FY 2014? Well, the stock market is at an all-time high
which should drive additional tax revenues upward. As investors sell stocks at large gains or
receive dividends in 2013, incomes and federal taxes will grow considerably. Meanwhile, the federal government is certainly
headed for another Continuing Resolution (CR).
In addition, the FY 2014 CR could be longer than normal when you
consider that President’s Obama’s budget was delivered to Congress two months
later than required and the House and the Senate have a $91B difference in the
spending gap. Congress has rarely appropriated
federal budgets by September 30th under normal conditions and FY
2013 and FY 2014 are far from normal.
Great article grandpa! My daddy is still surprised that you think that a nearly $500M loss is OK enough. Maybe broad-based sequestration should be replaced by more targeted savings in other places (except tuition & mortgage interest deductions!). Miss you & grandma already! Love, Owen J. Lee
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