Sequestration not favored method to cut budget deficit: survey

WASHINGTON Mon Mar 4, 2013 3:53am EST

The White House is seen through trees from the National Mall in Washington, March 3, 2013. REUTERS/Jonathan Ernst

The White House is seen through trees from the National Mall in Washington, March 3, 2013.

Credit: Reuters/Jonathan Ernst

WASHINGTON (Reuters) - A sound plan is needed to reduce the budget deficit over the next 10 years, but wholesale government spending cuts should not be the core of the program, according to a new survey of economists.

The National Association for Business Economics' poll of 196 members found more than 70 percent opposed the full implementation of $85 billion in federal budget cuts known as the "sequester" that were set to start taking hold last Friday.

The International Monetary Fund last week warned that the spending cuts, if fully implemented, could shave at least 0.5 percentage point off gross domestic product this year.

"A significant majority of panelists was opposed to full budget sequestration," NABE policy survey committee chairman Jay Bryson said in a statement.

"However, there was nearly unanimous agreement that some form of deficit reduction should be enacted over the next 10 years," said Bryson, who is also a senior economist at Wells Fargo Securities.

Economists favored spending cuts to reduce the deficit over the long-term, with most respondents indicating that cuts should be focused primarily on entitlement programs - Social Security retirement and Medicare healthcare.

About one-third of respondents who supported cutting the deficit also favored an equal mix of spending cuts and tax increases. That compared to 45 percent in the previous survey.

Only 12 percent believed the deficit should be reduced "mostly" by raising taxes. Less than one percent believed that the budget gap could be reduced "only" through higher taxes.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)

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Comments (2)
AZreb wrote:
And are these the same “economists” who touted the wonderful economy just before the bubble burst? The same ones who keep telling us we are in a “recovery?

Please send us some of the rose-colored glasses you are wearing or some of the wacky-tobacky that it seems you are smoking.

Mar 04, 2013 7:35am EST  --  Report as abuse
Jose3 wrote:
Sequestration is the only available method to cut spending since Obama refuses to draft a document on which programs to save and which ones to cut. Doing so would create something that looks like an actual budget.

Mar 04, 2013 11:05pm EST  --  Report as abuse
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