Spin and counterspin in the sequester debate

at 06:00 AM ET, 02/26/2013


(KEVIN LAMARQUE/REUTERS)
“Are you willing to have teachers laid off, or kids not have access to Head Start, or deeper cuts in student loan programs just because you want to protect a special tax interest loophole that the vast majority of Americans don’t benefit from? That’s the choice. That’s the question.”

— President Obama, remarks on sequestration, Feb. 19, 2013

“What sequestration is, it’s a terrible way to cut spending. I don’t disagree with that. But to not cut 2.5 percent out of the total budget over a year when it’s twice the size it was 10 years ago?”

— Sen. Tom Coburn (R-Okla.), Fox News Sunday, Feb. 24

Can you trust what any politician says about the impact of the sequester? Let’s just say all facts and figures should be viewed with skepticism.

The sequester is a remarkably blunt instrument, slashing many programs with equal vigor. Another issue is that the federal fiscal year, which ends Oct. 1, has just seven months left, so these reductions must be squeezed into a shorter time frame. That heightens the pain to federal agencies, especially because some of the biggest parts of the budget (such as Social Security) have been walled off from any cuts.

There is also a ramp-up effect. On March 1, when the sequester goes into effect, the cuts are not immediate; they will build up over time, so the effects may be difficult to discern at first.

These cuts also would come after the federal budget has grown dramatically in recent years. In some ways, the reductions would undo budget increases that President Obama engineered as part of the stimulus law. But even so, this round of reductions would still leave many programs at spending levels near or above what they were when Obama took office. Whether that is a good or bad thing is in the eye of the beholder.

Let’s take a look at a common claim made by Republicans and then one program — Head Start — highlighted by the Obama administration. We will continue to dig into other claims later this week.

“We’re only cutting 2.5 percent of the budget.”

Virtually all of the $85 billion in reductions are being made in the discretionary budget — which is only about 31 percent of federal spending. So this figure, cited by many Republicans, is based on the wrong-sized pie.

Discretionary spending must be funded year after year by Congress, whereas so-called mandatory programs (Social Security, Medicare, Medicaid, food stamps and the like) are on automatic pilot unless Congress changes the law. The mandatory programs are largely untouched in the sequester — though Medicare providers must take a 2 percent haircut — even though projections show that mandatory programs are most responsible for the growth in spending.

In effect, that means one-third of the budget is carrying the burden of almost all of the cost reductions. And then on top of that, the cuts must be done in about half a year. Do the math — the percentages add up very quickly.

The Bipartisan Policy Center calculates that on the non-defense side, that translates into a reduction of 8 percent. Defense spending faces an even higher hurdle — 13 percent. Those numbers are significantly higher than just 2.5 percent.

“Up to 70,000 children would lose access to Head Start and early Head Start services.”

This estimate comes from a letter written by Health and Human Services Secretary Kathleen Sebelius. Let’s provide some context for that figure for the program, which is intended to be a sort of pre-school for low-income children and their families.

First of all, the budget for Head Start has been supercharged in recent years, jumping from $6.87 billion in 2008 to $7.97 billion in 2012. Enrollment, which was slightly over 900,000 for a decade, jumped to 964,000 in 2011 after receiving a $2 billion appropriation in the stimulus law, also known as the American Recovery and Reinvestment Act (ARRA).

Moreover, though the stimulus was intended to be temporary, the 7 percent boost in the size of Head Start has become permanent. Here’s how the administration put it in 2012 budget documents:

Programs that received expansion funding under ARRA will have these funds added to their regular base funding. The FY 2011 appropriation added one-half of the annual funding for these expansion programs to the base. This FY 2012 appropriation adds the remaining one-half to the base. This funding will allow expansion programs to continue to serve the full enrollment levels approved under the Recovery Act expansion.

So, in effect, the sequester — which would order a cut of $422 million in Head Start — would begin to unravel an expansion in the program recently engineered by the administration.

The 2008 enacted amount for Head Start, translated into 2013 dollars, would be $7.45 billion. The post-sequester total for Head Start would leave the program at $7.55 billion. So the Obama administration would still be slightly ahead of the game even after sequester.

The 70,000 figure stems from some simple arithmetic, not an actual determination of the number of children who would lose their place in the program. An HHS official said the department took historic funding levels and the average cost per child to come up with a number.

“If sequestration takes effect in March, most Head Start programs that do not offer summer services would either end their current school year earlier than planned, or delay the next school year,” he said. “For year-round programs, the grantees would likely opt not to fill openings after children age out. Transportation cut-backs are also a likely option for savings.”

In other words, not all of those reductions might materialize. In any case, even if they did, the sequester would return Head Start to the size of the program before Obama became president. We obviously take no position on whether that is good or bad.

Advocates might note that the population of children under age 5 had increased from 23.2 million in 2001 to 24.3 million in 2010, so the program was due for an increase; projections show the under-5 population continuing to grow in the coming years. But detractors might note that there have been persistent questions about Head Start’s effectiveness and question whether such an expansion is necessary when tough budget choices must be made.

The Pinocchio Test

In both cases, these claims lack context that would help listeners understand what these numbers really mean.

Two Pinocchios





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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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