* Cuts mean longer airport lines, more homeless
* U.S. military not seen compromised at 2007 funding levels
* Government furloughs could take weeks to implement after
By David Lawder
WASHINGTON, Feb 14 Hundreds of thousands of
people made homeless, long waits at airports and criminals going
Those were among the dire warnings from the Obama
administration on Thursday of the consequences of automatic
public spending cuts that are due to kick in next month.
While the measures do indeed threaten jobs and the economic
recovery, experts say government agencies are overplaying the
effect of the $85 billion "sequestration" cuts to jolt lawmakers
into halting them.
Deputy Defense Secretary Ashton Carter told a Senate
Appropriations Committee hearing that U.S. military readiness
would be eroded by the across-the-board cuts, to be split evenly
between military and domestic discretionary programs.
Carter said some 46,000 contract employees would be laid
off, and 800,000 civilian employees would be furloughed for 22
days and ship and aircraft maintenance would be slashed.
But the cuts are only a small portion of the overall $3.6
trillion U.S. annual budget, and a miniscule component of the
vast U.S. economy.
"Somehow, the idea that if we go back to 2007 military
funding levels we're going to be a second-rate power, well
that's overdoing it," said Lawrence Korb, a senior fellow with
the Center for American Progress and a former U.S. assistant
"If you kept this cut, you're back to $500 billion a year. I
find it hard to get that worried about it," Korb said, noting
that this was still vastly more than any other country spends on
A senior White House budget official cautioned, though, that
sequestration will have grave real effects.
"We simply cannot cut $85 billion out of our budget over the
next seven months without critical consequences for defense and
non-defense," said Danny Werfel, controller for the Office of
Management and Budget.
He was one of several administration officials, including
cabinet secretaries, to list the serious ramifications if
Congress and President Barack Obama did not reach an agreement
to stop sequestration.
The Justice Department predicted that it would handle 1,000
fewer criminal cases this year due to the cuts. The FBI would
have to furlough all of its employees for up to 14 days, which
the agency said was the equivalent of taking 775 agents off the
"Criminals that should be held accountable for their actions
will not be held accountable and violators of our civil laws may
go unpunished," Attorney General Eric Holder wrote in a letter
to Senator Barbara Mikulski of Maryland, the chairwoman of the
Senate Appropriations Committee.
Homeland Security Secretary Janet Napolitano said that
screening lines at busy U.S. airports could grow by up to an
hour as Transportation Security Administration staff are
Waits at border crossings could reach 4 to 5 hours, ports
could face gridlock and reduced Coast Guard patrols would mean
less interdiction of drug and illegal immigrants and more
pressure on fisheries, she said.
Secretary of State John Kerry said that "vital missions of
national security, diplomacy and development" were at risk from
the budget crunch.
Housing and Urban Development Secretary Shaun Donovan
predicted some 225,000 people, including veterans, could be at
risk of becoming homeless as they lose access to housing
vouchers or emergency shelter programs.
The Pentagon has more flexibility to deal with the cuts than
domestic agencies, said Gordon Adams, an American University
foreign policy professor.
Domestic agencies are more payroll-based, so they have
little choice but to lose people, whereas the Pentagon has all
of its war operations and military pay exempted, and its
procurement activities can largely run on previously allocated
dollars. "We are not suddenly going to be subject to overseas
But even on the domestic side, the predictions of gloom are
subject to hyperbole and political calculation, he said.
"If I'm the administration, I'm going to ramp up the biggest
and most horrible effects I can to put pressure on the
Republicans" to reach a deal to prevent the cuts.
Werfel acknowledged that, unlike a government shutdown, not
all of the effects are going to happen immediately when the cuts
begin on March 1.
In some cases, furlough notices will go out at that time,
but employees may not be sent home for 30 days due to statutory
notice periods. In other cases, negotiations with unions over
implementation of furloughs may take longer.
But the effects of the cuts, will build up "relatively
quickly" within weeks and months, Werfel said. The layoffs,
furloughs and curtailed services described by administration
officials would more likely be spread over the seven months to
the end of the fiscal year on Sept. 30.
Part of the problem the administration faces is a lack of
flexibility in prioritizing the cuts, which were aimed at nearly
every discretionary budget account and designed to pressure
lawmakers to reach a broader agreement to reduce deficits.
Lack of alternative preparations means that agencies have
little choice but to furlough employers and curtail operations
to meet their savings targets for the fiscal year.
But after that, defense savings can be found that will not
compromise U.S. security, said Mattea Kramer, research director
at the National Priorities Project, a Massachusetts research
group focused on the U.S. budget.
"There is waste, there are obsolete programs to be
sunsetted, there is Cold War technology that we need not be
investing in any longer," Kramer said.
The dire warnings of chaos on the domestic side may be more
motivated by worries that the automatic cuts will hit economic
growth, which is the top Democratic priority, said Ethan Siegal,
who advises institutional investors on Washington politics.
The Congressional Budget Office forecast last week that if
the sequester occurred, it would reduce U.S. economic output by
0.6 percentage points and slash 750,000 jobs.
Siegal said the administration may find ways to mitigate the
effects of the cuts, but it is not politically advantageous to
do so at this time, when it wants to put maximum pressure on
Congress to reach a budget deal.
He predicted that the sequester would be delayed again just
before a March 27 deadline for new government funding
"Government agencies are marvelous at massaging these things
and moving money around."
In a sign that lawmakers are looking for ways to prevent the
cuts, Senate Democrats offered a plan on Thursday to replace the
sequester with tax hikes and reduced farm subsidies, but the
proposal is expected to be quickly shot down by Republicans.
OMB's Werfel said that the administration will do what it
can to blunt the cuts.
"Whatever the tools we have, we're going to use. I'm not
going to comment on specific aspects, I just know that it is
going to be enormously challenging and there is no way we're
going to mitigate these impacts effectively enough," he told
reporters after the hearing.