The sequester disconnect

March 4, 2013

Last week media was in a frenzy about the effects that federal spending cuts would have on states and cities under sequestration. Last Monday morning, the White House put out information including the graphic above to highlight the implications of spending cuts for the most vulnerable Americans. These are tough numbers, but there is no context provided to understand the magnitude of spending reductions.

I spent all week on Twitter trying to point out that cuts to state and local governments from the sequester would sting, but they would not chop off limbs. Media were reporting that communities would be devastated. Reports highlighted personal stories from employees who were worried about their jobs or loss of services. But almost all the frantic coverage failed to put the funding reductions for state and local governments in context. None of the coverage focused on the possibility that state governments could, and most likely would, damper or avert these cuts by finding internal efficiencies and re-prioritizing their own budgets.

A broader view was provided by Standard & Poor’s via

In fact, states and municipalities may already be fairly well prepared to handle the effects of sequestration, thanks to cutbacks and other austerity measures they’ve already made in response to a weaker revenue environment. Standard & Poor’s Ratings Services said in a report Thursday that sequestration  “may have only minor negative credit consequences for state and local governments and their affiliated entities.”

“States and many local governments have been actively monitoring developments at the federal level, and we believe they have evaluated the potential effects of sequestration in their revenue forecasts and budgets,” Standard & Poor’s credit analyst Gabriel Petek said Thursday in a statement.

But the numbers put out by the White House and magnified by others seem to contradict S&P’s comments. It may help to drill into a few of the numbers cited by the White House.

“Cut after school programs for 1.2 million kids”

There are numerous after school programs in the U.S. According to a 2011 study by B.J. Hirsch, cited  by Wikipedia:

After school programs are very common today in the United States. The 40 largest national youth organizations today have a total membership of about 40 million youths. These programs have shown results of better test scores, improved homework completion, higher grades, and even the psychosocial development of the student.

After school programs are important for children. Funding may now need to be found at the local and state level to make up for the loss of federal funds. But the funding to make up a reduction of 1.2 million out of 40 million will not devastate budgets.

“Eliminate more than 4 million meals for sick and homebound seniors”

I’m assuming that the White House means that 4 million fewer meals will be provided annually in the U.S. This is about 11,000 fewer seniors per day. But Meals on Wheels, the major provider of home-delivered meals, says that there are 5,000 local Senior Nutrition Programs in the United States. These programs provide well over one million meals to seniors who need them every day. Unknown to many people, this program is fueled by an army of volunteers. It is said that this group, numbering between 800,000 and 1.7 million individuals, is the largest volunteer army in the nation. I know this because my stepmother, a retired oil attorney, works two days a week packing food prepared by paid professional staff. There are a million others like her in the Meals on Wheels system.

“Eliminate 30,000 teachers and school staff”

The most important reduction that the White House pointed to was a loss of funding for teachers and school staff. America really has to up its game on the education front. But the Institute for Education Sciences says that in 2011 there were 3.3 million public school teachers and a student/teacher ratio 15.2 to 1 in the U.S. Teachers are one of the largest employee groups in the nation. Hopefully funding for teachers can be found at the local level (where the majority of school funding comes from) or from the state when federal funds are cut.

America is a wealthy nation, but we must define our priorities for spending and get good results for what we fund. It would be great to fund everything to the maximum requests, but it is just not possible. State and local governments balance their budgets every year and evaluate their priorities. These cuts will sting, but with creative efforts at the local and state levels, these federal cuts can be offset.

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