Sequester would axe large federal spending programs in CA

ScissorsFeb. 25, 2013

By Chriss Street

Over the weekend, the White House released a report detailing some of the programs and services in California that would be impacted beginning on March 1.  The Obama Administration has threatened that the cuts will result in a massive contraction of the national economy.

The breakdown of the effects on California was politically structured as an emotional call for Republicans to commit hara-kiri by compromising the demands of their base for fiscal discipline.  With sequester only amounting to 2 percent of spending, the cuts do not seem to be as earth shattering as the media has predicted.   

Sequester is defined as the act of removing, separating or seizing anything from the possession of its owner under the process of law for the benefit of creditors or the state. The term “budget sequestration” was first used to describe a section of Gramm-Rudman-Hollings Deficit Reduction Act of 1985 under President Ronald Reagan. It set hard caps on spending.

The sequestration was abandoned under President George H.W. Bush and replaced by a required PAYGO under the Budget Enforcement Act of 1990 that lasted until 2002, when President George W. Bush abandoned budget discipline.

California will suffer the following cuts, according to the Obama Administration:

Teachers and SchoolsLoss of approximately $87.6 million in funding for primary and secondary education, equivalent to the cost of 1,210 of the 310,000 teachers in the state.  In addition, California also will lose approximately $62.9 million in funds for about 760 special education teachers, aides and staff who help children with disabilities.

Work-Study Jobs: Approximately 9,600 fewer low-income students in California would receive aid to help them finance the costs of college and around 3,690 would lose federal grants for work-study jobs that help them pay for college.

Head Start: Head Start and Early Head Start services would be eliminated for approximately 8,200 children in California.

Funding for Clean Air and Water: California would lose about $12.4 million in environmental funding for clean water and air quality.  In addition, it may lose another $1.9 million in grants for fish and wildlife protection.

Military Readiness: Approximately 64,000 civilian Department of Defense employees would be furloughed, reducing gross pay by around $399.4 million.  Army base operation funding would be cut by about $54 million.  Air Force operation funding would decrease by about $15 million.  Navy maintenance to repair five ships in San Diego and aircraft depot maintenance in North Island could be delayed or canceled.

Funds for Law Enforcement and Public Safety: California would lose about $1.6 million in Justice Assistance Grants for law enforcement, prosecution and courts, crime prevention and education, corrections and community corrections, drug treatment and enforcement and crime victim and witness initiatives.

Job-Search AssistanceCalifornia would lose about $3.3 million in funding for job search assistance, referral and placement.

Child Care: Up to 2,000 children deemed disadvantaged and vulnerable could lose access to child care.

Vaccines for Children: Around 15,810 fewer children would receive vaccines for diseases such as measles, mumps, rubella, tetanus, whooping cough, influenza and Hepatitis B due to reduced funding for vaccinations of about $1.1 million.

Public HealthCalifornia would lose approximately $2.6 million in funds to help upgrade its ability to respond to public health threats including infectious diseases, natural disasters and biological, chemical, nuclear and radiological events.  In addition, California would lose about $12.4 million in grants to help prevent and treat substance abuse.  The California State Department of Health Services would lose about $2 million that would have paid for 49,300 HIV tests.

STOP Violence Against Women Program: California could lose up to $795,000 in funds that provide services to victims of domestic violence.

Nutrition Assistance for Seniors: California would lose approximately $5.4 million in funds that provide meals for seniors.

I do not want to understate that any cuts to a group of Californians receiving federal benefits will be painful.  But in my recent report, California Admits Higher Taxes Kill Tax Collection, the Not-So-Golden-State is proving that raising taxes to pay for deficit spending destroys economic growth and results in lower tax collection.

Even with the sequester, the Congressional Budget Office projects that over his eight years in office, President Obama will have engaged in $7.5 trillion in deficit spending and the national debt will have almost doubled.  The burden of this federal debt will be painful to all Californians.

CHRISS STREET & PAUL PRESTON
Present “The American Exceptionalism Radio Talk Show”
Streaming Live Monday through Friday at 7-10 PM
Click here to listen:  http://www.ustream.tv/channel/american-eceptionalism-news

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13 comments

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  1. us citizen
    us citizen 25 February, 2013, 13:11

    BO is full of BS. This is nothing but another scare tactic. Ya know you can only cry wolf a few times before NO one cares or gives a rats ass anymore. BO’s time is way past that. Im not eveeeeen going to get into his blatant lying.

    Bring it onnnnnnn!!!

    Reply this comment
  2. Douglas
    Douglas 25 February, 2013, 14:19

    Chriss Street:
    “the Not-So-Golden-State is proving that raising taxes to pay for deficit spending destroys economic growth and results in lower tax collection. ”
    …………………………………
    Daniel J. Mitchell, CATO Institute”

    “But it also means teaching folks on the right that it is wildly wrong to claim that “all tax cuts pay for themselves” or that “tax increases always mean less revenue.” Those results occur in rare circumstances,”
    ………………………………..
    It is not just wrong to say that raising taxes results in lower revenues, it is “wildly wrong”

    Reply this comment
  3. us citizen
    us citizen 25 February, 2013, 17:04

    Its called the Laffer rule………(dont know if I got that right) where returns diminish at a certain point and it is very true.

    Reply this comment
  4. Hondo
    Hondo 25 February, 2013, 17:30

    The ‘Stop violence against women’ program is where they spend a 700 grand telling women to pee on themselves if someone attacks them.
    No great loss there.
    Hondo…

    Reply this comment
  5. eck
    eck 25 February, 2013, 19:17

    Even if I believe these numbers, it’s still a teeny percentage of what is current. Also, most (or all?) effects public employees of which there are too many and are (a big) part of the overall problem.

    Reply this comment
  6. loufca
    loufca 26 February, 2013, 06:03

    Douglass, let’s see who Mr. Mitchell is and his beliefs:

    “Daniel J. “Dan” Mitchell is a libertarian economist, senior fellow at the Cato Institute. He is a proponent of the flat tax and tax competition, financial privacy, and fiscal sovereignty.

    One quote does not prove a person’s position. I would say that your comment is “wildly wrong”.

    Reply this comment
  7. Dyspeptic
    Dyspeptic 26 February, 2013, 10:12

    US citizen is right about Obama’s scare tactics. You can only work the Chicken Little routine so often before people start tuning you out and focusing on more important things like The Academy Awards or Kim Kardashians latest tweet. No matter how much the Regime Aligned Media try to prop him up, people are starting to tune out all the scare mongering and Imperial blather.

    Besides, the 2% “cut” in spending is just a slight reduction in a projected increase, not an actual reduction from lasts years budget. The Defense Dept. and Federal Govt. as a whole will both spend more this year than last year so there is no real cut in govt. spending at all.

    Keep in mind that the “Defense” Department accounts for 44% of global military spending. Does the U.S. GDP constitute 44% of global GDP? No, not even close. More like 20%. Large cuts in military spending are absolutely necessary no matter what that might do to GDP in the short run. We taxpayers can’t afford America’s unsustainable, imperialistic, meddlesome foreign policy any more. Period.

    On the subject of tax rates vs. tax revenue even Arthur Laffer would admit that the so called “Laffer Curve” only applies under certain circumstances. So Dan Mitchell (and Douglas) are right about that. That doesn’t mean that Chris Street is wrong though. If you want an exhaustive explanation of the Laffer Curve from the horses mouth so to speak, follow the link below to an article at The Heritage Foundation. It shows that the concepts behind the Laffer Curve are subtle and complex and therefore unlikely to be understood by politicians or their media mouthpieces.

    http://www.heritage.org/research/reports/2004/06/the-laffer-curve-past-present-and-future

    P.S. Arthur Laffer is a big Jerry Brown fan, go figure. And if you want to see Laffer get his head handed to him watch the Laffer vs. Peter Schiff CNBC debate on YouTube. Poor Arthur, he really was as wrong as you could be about the housing bubble.

    Reply this comment
  8. Douglas
    Douglas 26 February, 2013, 11:03

    “concepts behind the Laffer Curve are subtle and complex and therefore unlikely to be understood by politicians or their media mouthpieces.”

    So true. I simply tried to point out that the Laffer curve is grossly misinterpreted ( as Dan Mitchell said), by BOTH sides. Well known conservatives have been known to state, incessantly, that “reducing tax rates will increase tax revenue. It has been proven EVERY TIME it has been tried.”

    Bunk.

    Laffer never said any such thing. Dan Mitchell flat denies it. us citizen actually stated it more correctly “returns diminish at a certain point”. Revenues will (probably) not increase by the same percentage as the tax rate increase, and the increased rates will often have a negative effect on economic growth and employment. But there is usually not an inverse relationship, as Chriss Street implied (“raising taxes to pay for deficit spending destroys economic growth and results in lower tax collection.”)

    Even more important, tax rate changes do not occur in a vacuum. There are many other factors which effect economic activity and tax revenues. In another video, Dan Mitchell says that even the phenomenal increase in revenues after Reagan’s tax cuts were likely NOT due entirely to the Laffer curve effect. The economic system is much too complex to isolate one factor as determining total tax revenue.

    Reply this comment
  9. dltravers
    dltravers 26 February, 2013, 17:25

    The Feds take tax money out of the state and give it back to us with strings attached. Get out of our lives and let the locals fund their own schools and programs.

    The Feds need to butt out and focus on the tasks oultined in the founding dcouments of our country.

    Reply this comment
  10. JoeS
    JoeS 26 February, 2013, 20:10

    Obama doesn’t cut welfare for illegals? EBT at liquor stores and fast food?

    Reply this comment
  11. The Modified Ted Steele Methodologies (tm)
    The Modified Ted Steele Methodologies (tm) 27 February, 2013, 13:56

    That is incorrect JoeS– The Pres did cut EBT for aliens!

    #thetedsystem

    Reply this comment
  12. JLSeagull
    JLSeagull 27 February, 2013, 14:46

    Let’s all shed a tear for Jerry Brown. There goes his faux balanced budget (balanced with federal funds) down, down, down in flames. Boo Hoo.

    What really scares the big Zero is that that the sequester goes into effect — and nothing happens. It shows him up to be the world-class, Nobel Laureate liar that he is.

    Reply this comment
  13. OG
    OG 27 February, 2013, 20:48

    How many trillions do we still owe on the occupation of Iraq? Let’s give Wall Street more taxpayers’ money and the economy will rebound, right? Right-wingers and pure free market advocates are very funny people. no?

    Reply this comment

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