Join Early Retirement Today
Closed Thread
 
Thread Tools Display Modes
The Sequester - Are we being hornswoggled?
Old 02-22-2013, 07:31 PM   #1
Recycles dryer sheets
Stanley's Avatar
 
Join Date: Jan 2013
Posts: 194
The Sequester - Are we being hornswoggled?

I have heard that the sequester will chop about 85 billion dollars from the Federal budget. This is about 8% of this year's deficit, and 3% of the total budget. The biggest cut by agency will be about 13%.

How Federal Spending Would Be Cut Under the Sequester - WSJ.com

Many of us have had to cut our budget from one time to another. Is it really going to be that bad? Even a 13% cut is not exactly a meat-axe, maybe a chief's knife?

My instincts tell me it won't be that bad.

Note: I carry no brief for either party. I can and do split my vote very frequently.
Stanley is offline  
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-22-2013, 07:53 PM   #2
Recycles dryer sheets
TOOLMAN's Avatar
 
Join Date: Jan 2013
Posts: 296
Quote:
Originally Posted by Stanley View Post
I have heard that the sequester will chop about 85 billion dollars from the Federal budget.

My instincts tell me it won't be that bad.

Note: I carry no brief for either party. I can and do split my vote very frequently.
I have served as an appointed public official at the county, and state level. Budgets were in the Millions - not Trillions, but from my experience, you could sustain this level of cutting for several years before you cut to the bone. Seems to me government in general is about 7O% efficient vs. the private sector. YMMV.
TOOLMAN is offline  
Old 02-22-2013, 08:44 PM   #3
Dryer sheet aficionado
 
Join Date: May 2007
Posts: 46
Agreed. Obviously politicians are going to spin it as if it was the end of the world. I bet it is like waking up on Jan 1, 2000.
UnderTheRadar is offline  
Old 02-22-2013, 08:57 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,361
Of course the media have to spin it as the great crisis, because they need to keep the eyes on their adds. Then the officials have to describe the worst case partly to get attention. I sometimes think that doing away with over 50% of the reporters would not hurt for example, perhaps then feeding frenzies among the media would not be as strong.
meierlde is online now  
Old 02-22-2013, 09:08 PM   #5
Thinks s/he gets paid by the post
martyp's Avatar
 
Join Date: Sep 2010
Location: Thailand countryside, Sisaket province
Posts: 1,331
I don't know . . . It's hard for me to see how across the board budget cuts won't be painful to us somewhere soon. National parks? Air traffic control? Some defense contracts? My guess is that Congress and the Administration will wait to see where the most blowback comes from and then fund those areas or authorize moving funds around. I think this will be limited and in the end there will be less spending for the rest of the year. Next year is another story.
__________________
Happy, Wild, and Free
martyp is offline  
Old 02-22-2013, 09:21 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
jollystomper's Avatar
 
Join Date: Apr 2012
Posts: 6,134
Bear in mind that what is being cut is not actual spending, but projected spending.

An analogy. This year I spend $100 on widgets. Next year I plan to spend $106 on widgets. But due to the sequester, my budget is "cut" so that I can only spend $103 on widgets. Oh, the horror!

Politicians have learned that, to make a budget cut seem painful, cut the most visible things that people will see. Instead of cutting a level of bureaucracy that is invisible to people (and which if it were, people would wonder what they really do), cut something visible, like rangers at a national park, to make people feel the pain... and get upset at the budget "cut".

In my view - based on having worked with more than a few federal agencies in my career - is that there is little incentive in agencies to save money. If you spend less than your budget allocation, rather than being rewarded for being thrifty, you are "punished" by having your budget reduced because obviously you don't need that much money. So the game tends to be to always spend your budget, which has led to some interesting things at the end of fiscal years...
jollystomper is offline  
Old 02-22-2013, 10:04 PM   #7
Thinks s/he gets paid by the post
martyp's Avatar
 
Join Date: Sep 2010
Location: Thailand countryside, Sisaket province
Posts: 1,331
Here is one bit of information that explains why we are in the mess we are in.

As Sequester Deadline Looms, Little Support for Cutting Most Programs | Pew Research Center for the People and the Press
__________________
Happy, Wild, and Free
martyp is offline  
Old 02-22-2013, 10:23 PM   #8
Thinks s/he gets paid by the post
Nodak's Avatar
 
Join Date: Feb 2010
Location: Cavalier
Posts: 2,317
As far as I'm concerned the sequester can go ahead. The small installation I worked at spent large amounts of money on useless items like plastic plants just to get rid of the money at the end of the year. We had to do that so our budget would not get cut. I will never understand that way of doing business.
__________________
"Don't take life so serious, son. It ain't nohow permanent." Pogo Possum (Walt Kelly)
Nodak is offline  
Old 02-22-2013, 10:52 PM   #9
Thinks s/he gets paid by the post
timo2's Avatar
 
Join Date: Jul 2011
Location: Bernalillo, NM
Posts: 2,717
The only problem with the sequester is it cuts regardless of merit or priority. In my experience, some of the most useful federal programs for regular citizens are the most underfunded, and across the board cuts affect those programs more. On the other hand, federal agencies have known this was coming for a year, and many have been able to prepare for it. It also puts a whole year of cuts into just a few months, so that is a little more difficult to prepare for.

That said, I'm for letting the sequester go ahead. Congress is totally unable to prioritize federal programs, so this is the only way. It cuts defense, which would never be cut otherwise, and does not mess with Social Security, and the only effect on medicare is that payments for doctor's visits will be reduced by 2 percent (I read that on the internet somewhere, so it must be true ;-).

Here is an AARP article How the Sequester Could Affect Social Security, Medicare and More - AARP
timo2 is offline  
Old 02-23-2013, 06:30 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 11,318
It would help if Departments had some ability to shift funds around rather than cutting every separately budgeted program equally. Unfortunately, there is no way the Hill could come up with a process for making such shifts. If they could figure that out they could figure out a grand budget bargain.

This may or may not have significant impacts on the recovery but it doesn't sound anywhere near as dangerous as a debt ceiling default. Of course that crisis is coming again soon.
__________________
Idleness is fatal only to the mediocre -- Albert Camus
donheff is offline  
Old 02-23-2013, 07:39 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 17,203
Quote:
Originally Posted by donheff View Post
It would help if Departments had some ability to shift funds around rather than cutting every separately budgeted program equally. Unfortunately, there is no way the Hill could come up with a process for making such shifts. If they could figure that out they could figure out a grand budget bargain.

This may or may not have significant impacts on the recovery but it doesn't sound anywhere near as dangerous as a debt ceiling default. Of course that crisis is coming again soon.

I did see an article where they were talking about adding some language to the next continuing resolution that would allow them to move around the money.... I think they want this in defense more than others since most defense spending is very specific to a program and the cuts come out of the general fund...
Texas Proud is offline  
Old 02-23-2013, 07:39 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Feb 2011
Posts: 1,796
Regarding the sequester, I view it as a minor issue given it's simply a small decrease in the rate of increase in US Gov't spending (i.e. Washington's definition of a spending "cut"). Even after sequester "hits", most Gov't agencies will still get more $$ than they got last yr. But each US Agency head is inventing absurd scenarios to protect their $$$ like a bunch of mini-warlords. Example- ABC News (hardly radically right-wing) took apart Transportation Sec LaHood on his claims of need for massive air traffic control cuts if sequester happens-
Devastating Sequester Spending Cuts? Give Me a Break! - ABC News

My guess is that there will be some sort of legislation passed allowing various gov't agencies more flexibility to deal with these honestly minor overall "cuts". It strains credibility to think this small slow down in Gov't spending will affect the overall US economy in the least. Remember Congress just passed off-budget $60+Billion emergency aid package for Hurricane Sandy "relief" (inc. much not directly related to storm relief, BTW). The 2013 sequester is only $85B, so net ~$25B in a $16 TRILLION US economy (i.e. net sequester = 0.15% overall US GDP). Meh.
ERhoosier is offline  
Old 02-23-2013, 07:47 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: NC
Posts: 21,204
They've already delayed it once (remember all the overdone hand wringing in Dec), nothing stopping them from doing it again (and again). Several "leaders" have plans to delay it for several months, even out to 2014. Why would anyone doubt our ability to 'kick the can down the road,' perfected over a generation...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
Midpack is offline  
Old 02-23-2013, 07:55 AM   #14
Recycles dryer sheets
 
Join Date: Oct 2007
Location: Georgetown
Posts: 423
We are looking at about a 9% deduction; manageable but still an impact. What is more concerning is a lack of FY13 budget; the Continuing Resolution is quite binding and talk of a full year CR is a large concern.

Marc
Marc is offline  
Old 02-23-2013, 07:56 AM   #15
Thinks s/he gets paid by the post
martyb's Avatar
 
Join Date: Nov 2006
Location: Bossier City
Posts: 2,183
It will mean an unpaid furlough and a 20% cut in pay for however long it lasts. We are being told to plan for 22 weeks with one day per week unpaid.
martyb is offline  
Old 02-23-2013, 07:58 AM   #16
Thinks s/he gets paid by the post
 
Join Date: Feb 2011
Posts: 1,796
Quote:
Originally Posted by Midpack View Post
Why would anyone doubt our ability to 'kick the can down the road,' perfected over a generation...
Number of Southern European nations thought they had "perfected" this too. But whether it's an individual or a nation, eventually big deficit spending comes back to bite ya in the a$$
ERhoosier is offline  
Old 02-23-2013, 08:04 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: NC
Posts: 21,204
Quote:
Originally Posted by ERhoosier View Post
Number of Southern European nations thought they had "perfected" this too. But whether it's an individual or a nation, eventually big deficit spending comes back to bite ya in the a$$
Except they couldn't print their own money, big difference...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
Midpack is offline  
Old 02-23-2013, 08:22 AM   #18
Thinks s/he gets paid by the post
Nodak's Avatar
 
Join Date: Feb 2010
Location: Cavalier
Posts: 2,317
Here's a Congressional Budget Office take on it.
__________________
"Don't take life so serious, son. It ain't nohow permanent." Pogo Possum (Walt Kelly)
Nodak is offline  
Old 02-23-2013, 09:10 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2009
Posts: 6,682
Nodak, two good posts you made there (#8 and #18, the graph). I'm with you and the others who generally favor the sequester moving forward. It is a good test to see if the voters really want to see government spending "cut."
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is offline  
Old 02-23-2013, 09:53 AM   #20
Thinks s/he gets paid by the post
HawkeyeNFO's Avatar
 
Join Date: Jan 2010
Location: 5-sided building
Posts: 1,183
Quote:
Originally Posted by timo2 View Post
...federal agencies have known this was coming for a year, and many have been able to prepare for it.
I checked in to the Pentagon last May, and had several indoc sessions with old farts wearing 3 and 4 stars on their shoulders, and at that time they all said the plan was to "do nothing" and "put our head in the sand." Well, that worked the first time, but now in the past few days I have had the pleasure of determining which contractors will lose their jobs and/or how many hours will be cut from their contract. None of which is merit-based. Then when the furlough hits the govt employees, and the contractor support is decreased, the only ones left unaffected are the military. Guess who will be working extra hours (no overtime) to pick up the slack?

That being said, the bureaucracy is clearly bloated. DoD, especially at the pentagon and the major staff operations, should be cut to save money, and needs some true incentives to become more efficient. (Just don't mess with my 20 year retirement )
HawkeyeNFO is offline  
Closed Thread

Tags
sequester budget


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


» Quick Links

 
All times are GMT -6. The time now is 06:41 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.