It was an awful time. Federal employees had to take unpaid furlough days. Beneficiaries were thrown off of federal programs. Courthouses had to be sold. Federal agencies like the FBI, the Food and Drug Administration, and the National Institutes of Health strained to meet commitments, leading to more crime, more outbreaks of disease and less basic research, among other horrors.
This may sound like a description of the recent government shutdown, which ended October 16. But this describes the fallout from sequestration, the across-the-board cuts to discretionary spending that took effect March 1—arbitrary reductions that closely parallel the effects of the shutdown. In fact, depending on where you want to draw the line, the United States has been mired in an entrenched partial government shutdown for about four years, which has severely limited federal resources, put millions out of work, and served as a primary driver of our sclerotic recovery from the Great Recession.
And while the recent appropriations lapse lasted just 16 days, this broader shutdown is poised to drag on for at least a decade. Sequestration and artificial spending caps have become the new normal, and it’s redefining the role of government, rolling back the ambitions of the past, and constraining needed investments in the future. So let's call it what it is: a government shutdown that's infinitely worse than the one that just ended.
You could argue that the recent shutdown inflicted much more damage than sequestration. You would be wrong. Standard and Poor’s estimated that the shutdown cost the economy $24 billion over its 16-day stretch. Sequestration, meanwhile, will be in place for ten years unless Congress does something, and the spending cuts over that time total $1.2 trillion—50 times the economic impact of the shutdown. And that doesn’t include the knock-on effects to the economy—reduced purchasing power by federal employees, fewer contracts for private companies doing business with the government, and generally lower consumer spending as a result.
According to the Congressional Budget Office, sequestration cuts will cost as much as 1.6 million jobs if kept in place through the 2014 fiscal year, with a reduction in GDP of 0.7 percent. The continuing resolution funds the government at sequestration levels through January 15, 2014, so we’re well on our way. As veteran Congressional observer Norm Ornstein wrote, “Damaging as the shutdown is for governance, it is minor compared with the long-term damage of the sequester.”
Starting in FY 2014, sequestration acts less like an across-the-board cut and more like an artificial spending cap. This theoretically limits the damage, as appropriators can shuffle funds to preferred programs and phase out wasteful or unnecessary ones. But spending caps are just as damaging. […]
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