The WasteWatcher: The Staff Blog of Citizens Against Government Waste

The Sequester is Working

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


The biggest underreported story out of Washington this year is that the federal budget is shrinking and much more than anyone in either party expected.”

Thus begins Stephen Moore’s piece today in the Wall Street Journal about the budget sequester.  He lays out some notable numbers:

  • The Congressional Budget Office (CBO) annual outlays peaked in fiscal year 2011 at ~ $3.6 trillion.
  • Most analysts in Washington, after two years of President Obama, expected the annual outlays to be $4 trillion by fiscal year 2014.
  • Instead, due to budget cuts reducing the size of government, spending fell to $3.5 trillion is fiscal year 2012 and is on pace to be below $3.4 trillion by September 30, 2013.

Trust me, I am not happy that our spending is hovering near $3.4 trillion – no one could sanely argue that those high numbers are good but at least they are trending downward.

Moore points out the “gigantic budget blowout” began in President Bush’s last year and the first two years of the Obama Administration.  In fiscal 2009, federal spending surged by $600 billion and as a percent of GDP reached 25.2%, the highest since World War II.

What taxpayers need to worry about is that too many in Congress will try to reverse the sequester by accepting the President Obama’s demands for a “balanced approach” in the 2014 budget, in other words by raising taxes.  This would likely occur during the deal making over a continuing resolution or CR.  The chance the 12 appropriations (spending) bills will be done on time this year is slim to none.  The House has only passed four appropriation bills and the Senate has passed none as of this blog post.  It is important that the sequester caps be allowed to stay in place because it is doing the job it is suppose to do and it will allow additional expenditures to be cut automatically until 2021.

Moore points out that:

Discretionary spending soared to $1.347 billion in fiscal 2011, according to the CBO, but was then cut by $62 billion in 2012 and another $72 billion this year. That's an impressive 10% shrinkage.  And these are real cuts, not pixie-dust reductions off some sham baseline. Discretionary spending as a share of the economy hit 9.4% of GDP in fiscal 2010 but fell to 7.6% this year and is scheduled to slide to 6.4% in Mr. Obama's last year in office.”

Stephen Moore  says if the country sees any normal economic growth beyond the “anemic 1.4% growth rate so far this year” the deficit will continue to drop steadily.  This would be very good news.

He does caution us that “the fiscal story isn’t all rosy.  The major entitlements remain on autopilot and are roaring toward insolvency."  That will certainly be true without any major reforms to Social Security, Medicare, and Medicaid.  Moore says, "the Congressional Budget Office calculates that through July of this year Social Security, Medicare, and Medicaid spending are up $73 billion from just last year. This doesn't include ObamaCare, which is scheduled to add $1 trillion of new costs over the next decade.”

Now is not the time to stop the ratcheting down of government spending and reforming our soon-to-be-bankrupt entitlement programs.  To do otherwise would be disastrous for future generations and our nation.

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