Street: Impact of Sequestration on California
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.Street
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 (Pub.L. 99–177) 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 (Pub.L. 101-508) 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 Schools: Loss 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 Assistance: California 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 Health: California 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.