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he major objection most Republicans have to the coming sequestration budget cuts is that the cuts will fall disproportionately on the Department of Defense. Thats true; defense spending is about one-fifth of the federal budget but will take about half of the sequester cuts. But even for the Pentagon, the cuts are only to the rate of growth for the defense budget in coming years. They are not actual cuts that make spending decline. In a February publication, The Budget and Economic Outlook: Fiscal Years 2013 to 2023, the Congressional Budget Office (summary here, full report here) outlines the increases in defense spending that will happen even with the various spending caps and sequestration cuts that are currently law. Table 1-5 (Outlays) on page 30 outlines projected defense spending in the coming decade. For 2014, the figure is $593 billion. For 2015, it is $597 billion. For 2016, $611 billion. For 2017, $619 billion. For 2018, $628 billion. For 2019, $648 billion. For 2020, $663 billion. For 2021, $679 billion. For 2022, $702 billion. And for 2023, $714 billion.
Readers may notice that the figures cited above include war-related spending of between $75 billion and $103 billion for the entire decade to come. Because the war in Afghanistan is going on now, and there is no law to stop spending on the war at some point in the future, the CBO is bound to assume that the spending will continue. The rules the CBO has to follow are that any spending on the books (current law) is assumed to grow at the rate of inflation, says former CBO chief Douglas Holtz-Eakin. That means that it overstates spending when you plan to cut back in the future but have not yet passed a law (future appropriation) that reflects it.
But assume that U.S. involvement in the war in Afghanistan does end in the next year or so, and that war spending goes down or even disappears altogether. Even in that scenario, defense spending is scheduled to increase in every year except one, even with sequestration cuts. The CBOs numbers, minus war spending, begin with $518 billion in 2014. For 2015, the number is $510 billion. For 2016, $520 billion. For 2017, $525 billion. For 2018, $532 billion. For 2019, $549 billion. For 2020, $563 billion. And for 2021, $576 billion. (The CBO chart does not have relevant numbers for 2022 and 2023.)
So under a scenario of continued war in Afghanistan and under a scenario of no war in Afghanistan, and everything in between, defense spending is scheduled to rise steadily in the next decade, even with sequestration cuts.
The costly and complex road-clearing operation that was scheduled to start on Monday will be postponed this year because of the U.S. government's across-the-board budget cuts known as the "sequester," which took effect on Friday. Park managers have to trim $1.75 million from Yellowstone's $35 million annual budget, which will delay the opening of most entrances to America's first national park by two weeks. Park managers will give more details on Monday.
Local tourism industry leaders are not happy with the decision. A delay in the park's traditional early May opening and other service reductions could mean millions of dollars in lost tourism and tax revenues for small, rural towns in Montana and Wyoming. "I think it's counterproductive, and I expect a lot of people to be raising hell," said Mike Darby, whose family owns the Irma Hotel in downtown Cody, Wyoming, at the east gate of Yellowstone.
A car travels the newly plowed east entrance road over Sylvan Pass in Yellowstone National Park shortly after the park opened in this photo taken in May 2011.
Built in 1902 by frontier showman Buffalo Bill Cody, the hotel is decorated with bison heads and hunting rifles. The business survives the lean winter months by drawing local customers to its restaurant and Silver Saddle Lounge, where cowboys meet for a beer on weekends. A two-week delay in Yellowstone's opening means Cody will miss out on more than 150,000 visitors spending an estimated $2.3 million, according to figures released by the Cody Country Chamber of Commerce. Similar shortfalls in four other gateway towns around the park could put total losses from a two-week delayed opening at more than $10 million.
Beyond Yellowstone, the National Parks Conservation Association has warned that a $110 million cut to the National Park Service budget will result in job losses and reduced services at the country's 398 national parks. For example, the U.S. spending cuts could lead to a 20 percent reduction in spring student education programs at Gettysburg National Military Park in Pennsylvania, affecting 2,400 students; a two-week delay in the reopening of Glacier National Park's Going-to-the-Sun Road, which could cost $1 million in lost revenue daily to surrounding communities and concessions; and a delay in the opening of the Grand Canyon National Park's East and West Rim Drives, according to the NPCA. "It's alarming that this very avoidable threat could become a reality. From Yellowstone to Cape Cod, the Grand Canyon and Great Smoky Mountains, our national heritage and local economies are at risk," NPCA President Tom Kiernan said in a statement on Thursday.
Grizzly Bears
Congress has left Washington, guaranteeing that the sequester will go into effect at least temporarily. The memo dated Wednesday from Office of Management and Budget Controller Danny Werfel says that OMB now estimates a 9 percent cut to affected domestic agency budgets and a 13 percent cut to defense.
It also makes clear that the White House is giving agencies leeway in implementing the cuts. “Agencies' planning efforts must be guided by the principle of protecting the agency's mission to serve the public to the greatest extent practicable. Planning efforts should be done with sufficient detail and clarity to determine the specific actions that will be taken to operate under the lower level of budgetary resources required by sequestration,” Werfel wrote. For the first time, OMB emphasizes that agencies should look to restrict hiring, employee bonuses and travel to meet the budget goals.
That decision was praised by Sen. Tom Coburn (R-Okla.), who this week wrote to Budget Director Jeff Zients pointing out apparently non-essential positions being advertised as open in the federal government for hiring. “I applaud the White House’s decision to reverse its opposition to using options like a hiring freeze and travel restrictions to avoid inflicting pain on the American people through their sequestration policy. OMB today reaffirmed the administration’s flexibility to make common sense budget choices instead of senseless across-the-board cuts. If the administration would like additional flexibility to avoid harmful consequences I would encourage them to seek that authority from Congress,” Coburn said.
The memo reminds agencies that it must negotiate with unions where they represent employees. It also says that procurement will be affected. “Due to the government's large acquisition footprint, sequestration will inevitably affect agency contracting activities and require agencies to reduce contracting costs where appropriate,” Werfel writes. It also says financial assistance will take a hit in places. “In light of sequestration, agencies may also consider delaying awarding of new financial assistance obligations, reducing levels of continued funding, and renegotiating or reducing the current scope of assistance. Agencies may be forced to reduce the level of assistance provided through formula funds or block grants,” the memo states.
Read more: White House offers sequester guidance - The Hill's On The Money
