Hostages of Sequestration

Sequestration, which requires the federal government to cut 2.4% in across-the-board spending in the absence of an agreement between Congress and the White House, went into effect on March 1.  The rhetoric from the White House has portrayed this cut as gutting national defense, air traffic safety -- this article from the Huffington Post outlines where the cuts are planned.  The trick is that the White House has itself determined where these cuts will take place and it is the president who has enacted the cuts by executive order.

Given the level of irresponsible, out of control spending in which the federal government has been indulging in recent decades, particularly during the current administration, a 2.4% across-the-board cut is only a drop in the bucket compared to what is needed to bring the government back within its means.  At the same time, a 2.4% cut can certainly be spread evenly enough among the many government agencies in Washington so as to minimize the impact on necessary services.  Nonetheless, the cuts have been mainly concentrated in the Department of Defense, and TSA workers at airports are being furloughed purportedly leading to airport delays, schools serving military families and Native Americans are being cut, along with WIC payments.  In other words, the cuts are being allocated in such a way to maximize their visibility and to maximize the impacts they will have on the public.

William Niskanen predicted this type of behavior when bureaucracies are faced with budget cuts.  Niskanen postulated that government agencies would essentially hold "hostage" their highest-valued output in order to create pressure on appropriators to fully fund their requested budgets.  In this case, the Obama Administration is engaging in this behavior at a macro scale -- threatening the government's most highly-valued "outputs" in order to force Congress to raise taxes to avoid making necessary spending reforms.  The president may be overplaying his hand, however.  It remains to be seen whether he will succeed at forcing Congress to reverse the spending cuts and enact tax increases, but thus far, Congress seems to be standing firm.

Addendum:  If this is on the level, as it appears so far to be, an executive branch email seems to support the contention that the White House is attempting to "maximize the pain" from sequestration.  Apparently, when inquiring about spreading the cuts in his agency in such a way as to minimize the negative impact on services, an official was instructed: "however you manage that reduction, you need to make sure you are not contradicting what we said the impact would be.”