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Democrats: Spending Cuts to Slam Economy, Sandy Victims

Senate Dems' Dire Warnings

FBN's Liz MacDonald on the Democrats' memo that delivers the impact of spending cuts if the Congress doesn’t act.

A memo from Democrats on the House Appropriations Committee delivers the emotional impact of the $85 billion in mandated sequestration cuts coming March 1. (click here).

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The memo warns of furloughs of two weeks or longer for roughly 4,000 employees at the Federal Aviation Administration, and an unspecified number of layoffs of USDA food safety inspectors -- which could force meat plant shutdowns, it says.

Also, 5,000 border patrol officers could be furloughed, which “could jeopardize security at points of entry,” the memo says. Another 1,300 correctional officers could be laid off, as well as 1,000 federal law enforcement officers at places like the FBI. “The Justice Department would have to furlough hundreds of federal prosecutors,” says a White House official.

The memo also warns that $1.9 billion would be taken back from the $51 billion given in federal Sandy aid, and $1 billion in cuts in disaster relief at FEMA. The cuts could also mean $353 million in reductions in food programs for the poor, hurting women and children and costing “at least 1,600 state and local jobs due to reduced federal funding,” a White House official has warned, as well as $1.6 billion in funding cuts for medical research at the National Institutes of Health, “costing tens of thousands of jobs for scientists and students,” the official says.

Embassy security? Slashed too, by $168 million, the Dems warn, as the Benghazi, Libya, controversy rages on.

"This across-the-board cut will slow economic growth and job creation while cutting services and investments critical to the American people," Rep. Nita Lowey, ranking Democrat on the Appropriations Committee, says in a statement.

But the nearly $51 billion in Sandy aid has been criticized for being loaded with pork spending that had nothing to do with the hurricane, with media reports indicating less than half of the money was going to storm victims. Defenders of the aid bill say spending will go towards protecting the nation’s infrastructure from future storms.

The D.C. battle over the sequester cuts is picking up in intensity as the deadline forcing $1.1 trillion in federal spending cuts over the next ten years looms, with $85 billion due this March 1. U.S. debt is set to hit 87% of U.S. GDP in 2023 if reductions don’t take place, warns the Congressional Budget Office. Discretionary spending is in the bulls’ eye, as raising taxes or cutting Medicare, Social Security and Medicaid are political landmines in election campaigns.

As the jobless rate sticks stubbornly at 7.9%, the president is expected to use his State of the Union address on Tuesday night to advocate more government spending to create jobs, for items including infrastructure, clean energy and education.

On Dec. 31, the total debt of the U.S. government was $16.45 trillion. The Federal Reserve is buying U.S. government debt and mortgage-backed securities, a total of $85 billion monthly. Its balance sheet is expected to top $3 trillion for the first time by the end of this month -- $1.72 trillion of which is U.S. debt.

The Wall Street Journal notes that the sequester cuts actually equal about a third of the jump in discretionary spending since 2008. It says that the first two years of President Obama’s term actually saw federal domestic discretionary spending rising 84%, “with some agencies doubling and tripling their budgets,” citing the U.S. departments of Energy, Commerce and the EPA. "Fiscal year 2012 marked the fourth consecutive year of $1 trillion deficits,” says the Heritage Foundation.

The Journal says the furloughs Democrats are raising red flags about are really layoffs in an already bloated federal government -- “most of the layoffs will happen in Washington, D.C., the recession-free region that has boomed during the Obama era.” The paper says the sequester will actually help the U.S. economy by stopping the federal government from taking capital out of the hands of the private sector.

Meanwhile, entitlements are the sacred cow getting fatter by the day, with health reform the latest program for which taxpayers must foot the bill.

Even before health reform, “entitlement spending more than doubled over the past 20 years, growing by 110%,” inflation-adjusted, while “discretionary spending grew by 60%,” says the Heritage Foundation.

Meanwhile, “in 1962, defense spending was nearly half the total federal budget (49%); Social Security and other mandatory programs were less than one-third of the budget (31%),” notes the Heritage Foundation.

But that ratio flipped by 2012, when “entitlements were nearly 62% of total spending, while defense dropped to less than one-fifth (18.7 %) of the budget,” Heritage points out.

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