Why I Like the Sequester (Despite Flight Delays)
It's 1893. My great grandparents, after years of suffering persecution and hardships at the hands of the Cossacks in central Russia, gather all their belongings and, with no knowledge of English and fear for their lives, journey thousands of miles from their homeland to the United States. In 1933, my grandfather, suffering from the Great Depression, destitute in New York, resorts to theft in order to feed his family. By 1943, that same grandfather is drafted into the army, forced to leave his family, and faces death daily on the battlefields of Europe. In 1973, my parents, now trying to figure out how to live without gas and under high inflation, are still smarting from the memories of surviving the Cuban missile crisis, assassinations of presidents and civil rights leaders, race riots, and an unwanted war that threatens to involve them and their children.
In 2013, I'm upset because my flight out of Atlanta is 45 minutes late due to government budget cuts. Poor me!
The Sequester is Necessary
The U.S. budget is running a deficit of a trillion dollars a year. The national debt now exceeds the entire annual output, and is approaching Greek and Spanish levels. The spending by the government, as a percentage of gross domestic product, is at a historical high and is forecast to more than double in the next 20 years. The country potentially faces riots, deep austerity, high interest, and political upheaval like people in Europe are now experiencing. So to get things in order, U.S. leaders forced themselves into cutting government expenditures (not cutting the rate of growth mind you, but reducing costs) by about 2.5 percent this year to at least attempt to bring spending under control. And my generation, my lazy, over-privileged, self-indulgent, narcissist generation, whines and moans about the sacrifices. Waah!
But the sequester, which went into effect on March 1, is working, too. It is forcing the government to make hard choices and, like generations before, I'm being asked to make sacrifices. This is a good thing.
A Genuine Decrease in Federal Spending
For starters, the sequester is decreasing government spending. Even after talks about the balanced budget amendment, super-committees of Congress, late-night discussions at the White House, and nationally-televised presidential debates, no one came up with a "grand bargain," and given the current polarization in Washington, it's unlikely an agreement will be achieved at least in the next few years. But Washington leaders did have the foresight to require budget cuts, if nothing else could be agreed to. And so it happened. And like you, I'm now learning what it's like to live in a world where the government is actually spending less money each year, instead of piling on more debt.
Perfectly-Imperfect Spending Cuts
When the sequester was implemented, the law said that $1.2 trillion would need to be cut equally between parts of the government over a 10-year period. This was the fair thing at the time and necessary to get the bill passed. But, of course, that's not perfect. You can't equally spread the pain because there are some areas that can be cut more, and some that should be preserved. So now, two months later, the effects of those imperfections are playing out.
What kinds of imperfections? For example, the Federal Aviation Administration's decision last week to furlough air traffic controllers came under intense scrutiny. The air travel disruption was not only an inconvenience, but hurt business and commerce. Many cancer centers are also turning away patients because the law cut Medicare funding. Various federal departments, like the I.R.S., labor, parks, all announced that they would be forced to furlough employees and suspend or limit services for certain periods of time. Education programs like Head Start lost funding.
And, like any business owner who makes decisions and is unhappy with some of the consequences, the government is adjusting. Hearing the cries of the public and the media, it is taking action. For example, President Obama signed a measure March 27 that gave some agencies flexibility in applying cuts, and allowed the departments of agriculture, for instance, to avoid furloughs of meat plant inspectors. To resolve the airline crisis, for example, Congress passed a law that enabled the Federal Aviation Administration to use other funds set aside for grants to pay air traffic controllers. It's a temporary fix, but it's a start.
Let's Make Tough Choices, and Innovate
The great news is that sequestration began, which means something (however little) is being done to get the deficit under control. The amount of the cuts is not as important as the change in national attitude. The big question is now not should expenses be cut, but which ones. So now the government is forced into making the kinds of choices business people make every day. Should the Federal Aviation Authority get funding, or those cancer treatment centers? Is national defense more or less important than keeping the Liberty Bell open year around? Forfeit jobs at a military base, or fund Head Start education programs?
I don't know the answers to these questions. I have opinions. Everyone does. So now let's, as a country, make choices. Let's determine what's most important. This is painful, and difficult. But it's business, and the government doing what it has to do.
Is sequestration the way government should be doing business? Yes, it's exactly right. Can the process be made better? No. It's perfectly imperfect. No business person would find that unusual.
GENE MARKS | Columnist | Owner, Marks Group
Gene Marks is a columnist, author, and small-business owner. He oversees the Marks Group, a 10-person technology consultancy to small and medium-size businesses. A certified public accountant, Marks has also worked in the entrepreneurial services arm of KPMG. He writes for The New York Times, Forbes, and The Huffington Post.