Sequester: Sounds like ‘disaster’
Fill Chicago’s Soldier Field stadium with people. Or perhaps fill New York’s Madison Square Garden to capacity, do it again, and then a third time.
Either way, you’ll get a total of about 60,000 people. That’s a very rough idea of the number of tax filers who could be affected by cutting more than 5 percent from the federal grant supporting Volunteer Income Tax Assistance (VITA), the kind of dangerous cut envisioned by the beginning of the “sequestration” process in Washington, D.C.
This 60,000 figure represents an update of our earlier calculations regarding possible effects on VITA of across-the-board federal cuts scheduled to take place March 1. And that number doesn’t include the spouses, children, or other dependents of tax filers who would be affected by the loss of VITA’s free tax-preparation, asset-building, and financial-education services.
Neither does it account for the hundreds of thousands more, low- to moderate-income families who could lose VITA’s help over the course of eight additional years of scheduled sequestration cuts – cuts that Congress must act to stop, soon, or else court disaster for families, communities, and the economic health of our entire nation.
All told, those cuts come to more than $1 trillion, divided equally between two kinds of so-called “discretionary” spending: defense and non-defense programs.
The latter includes a wide range of critical education, health care, human services, public safety and security priorities – including VITA. Such federal-discretionary priorities already have been subjected to cuts that will total more than $1.5 trillion over the next decade, all in the name of reducing our federal deficit. (Interest savings brings that total to about $1.8 trillion.)
The “fiscal cliff” deal that Congress struck last month will produce about $600 billion in new revenues for deficit reduction, primarily through allowing tax cuts to expire for the wealthiest of households.
It’s significant to note that, so far, Congress has made about $2.50 in budget cuts for every $1 of new revenue that it’s raised. If the sequestration cuts go forward, that ratio will soar to $4 of cuts for every $1 of new revenue produced.
That imbalance is as striking as the fact that policymakers never intended to make such sweeping, indiscriminate cuts in the first place. Congress and the President set-up sequestration as a don’t-go-there scenario, a worst-case fallback to force them to agree to a wiser deficit-reduction approach.
Yet, their failure to compromise on finding wiser, more targeted cuts has brought sequestration’s meat-axe approach frighteningly close to reality – despite the fact that some experts have said it could result in the loss of 750,000 to 1 million jobs nationwide, hobbling the country’s economic recovery.
Time is quickly running-out for Congress to step back and take a wiser approach that better-protects the financial security of working families, and our entire nation. Simply put, policymakers should:
- Replace sweeping, sequestration cuts with more limited, targeted cuts that avoid harm to struggling families, and
- Reduce the need for damaging cuts by raising significantly more new revenues – and avoid taking those revenues from low- and moderate-income families, who can least afford it.
Federal deficit reduction is an important goal. But it shouldn’t be pursued in ways that increase poverty or income inequality, or it will work against economic recovery – starting with its effects on the financial security of the working families who represent the core of our nation’s economic strength.