Reuters blog archive
By Daniel Indiviglio
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
For all the rhetoric from both political parties, the impending U.S. budget cuts are more a blip than a bomb. An initial $100 billion-worth of federal spending reductions won’t do much real damage to the growing economy.
President Barack Obama has lately portrayed the so-called sequester as devastating and putting thousands of jobs in jeopardy. He has warned that cuts to air traffic control and airport security will cause travel delays - and even that defunded research could set back science for a generation.
There’s no doubt that the cuts are heavy-handed. The whole thing was supposed to be replaced by a more thoughtful package which Obama and Congress have been unable to negotiate. Even so, the federal budget, excluding interest payments, will still grow by $13 billion in 2013 and $1.8 trillion over the next decade, according to the Congressional Budget Office. The cuts, which will hit each year for a decade if they aren’t replaced, mostly eat away at projected increased spending, not the prior year’s level of outlays.