Sequester Cuts Highlight Government Inefficiency

NCPA March 12, 2013

President Obama has been full of doom-and-gloom predictions about the effects of the sequester cuts. This rhetoric is grandiose and false, says Economic Policies for the 21st Century.

• The Obama administration has claimed the sequester cuts are greater in magnitude than they are in reality.
• Obama has also insinuated that replacing sequestration with tax increases will not have any costs.
• The puzzling logic is that the public is supposed to believe that public agencies are so inefficient that a 1 percent cut in resources would trigger horrendous consequences but a 1 percent increase in taxes on individuals would be inconsequential.

Before sequestration took effect, the Obama administration claimed that the Capitol building's janitors would have their pay cut, that as many as 40,000 teachers could lose their jobs and long lines at the airport would become common.

• Education Secretary Arne Duncan figured the 40,000 number by dividing the cuts, $2.8 billion, by the average teacher's salary of $70,000.
• The $2.8 billion cut represents just 0.6 percent of the $820 billion government will spend on education.
• By suggesting that 40,000 teachers will lose their jobs as a result of the cuts, the government is saying that it is so inefficient and wasteful that it can't cut $2.8 billion from anywhere else in the entire budget.

Sequestration was not designed to allow public administrators any flexibility. It was designed to cut right at the heart of mandatory spending, to be painful. The Obama administration does not believe that public administrators have the capacity to reduce their budgets by one percent of the federal budget in a manner that increases the productivity of public sector employees.

Failing to differentiate between the public and private sectors, the Obama administration argues that reduction in the credits of government accounts affect the economy far more than raising taxes on individuals. By absolving itself of responsibility for managing public spending, the Obama administration is ultimately shifting a larger burden onto taxpayers in the future.

Source: "What Obama's Sequester Claims Say About the State of Public Administration," Economic Policies for the 21st Century, March 7, 2013.