In late September, Philadelphia Mayor Michael Nutter and
a small group of other big-city mayors met with reporters at the National Press
Club in Washington D.C. to enlist them in a campaign to pressure Congress to
forestall fiscal calamity. The mayors worried that the election was likely to come
and go without Congress doing anything to avert the nation from plunging off
the "fiscal cliff" - a term coined by Federal Reserve Chairman Ben
Bernanke - on Jan. 2, 2013.
On that date, if nothing is done beforehand, tax cuts enacted in the first term
of George W. Bush will expire, raising rates on everyone. Unemployment
insurance and a "payday holiday" on income-tax withholding will also
expire. At the same time, by prior agreement, Draconian across-the-board cuts
in the federal budget will begin, affecting every city and state. The
combination of these cuts and tax increases are widely predicted to send the
nation into recession.
Nutter and his colleagues implored Congressional leaders to "act like
adults" and work together to find a balanced, bipartisan alternative to
deficit reduction. But the mayors seemed resigned to the political reality that
nothing would happen before the election.
"Elections will happen. Someone will win and someone will lose,"
Nutter said. "The question becomes, 'Then what? What are we doing on Nov.
That is indeed the question.
Born out of the failure of a Congressional "super committee" in 2011
to work out a plan for trimming the rapidly growing deficit, the sequestration
cuts range from 7.6 percent for most federal programs to 9.4 percent for
defense spending. If imposed, they would slice approximately $109 billion from
the federal budget next year and $1.2 trillion over the next decade. Medicaid
and Social Security spending would be exempt, but virtually every other federal
agency and program would be hit hard, from health care and food safety to air
traffic control and a wealth of social safety net programs. Medicare would be
mostly spared, though payments to health providers would see a 2 percent cut,
about $11 billion. States would lose billions of dollars in education funding.
Law enforcement would also suffer, with cuts of $735 million to the FBI and
$136 million to the Secret Service.
Not everyone believes this is such a bad thing. Economists like William G. Gale
of the Brookings Institution have opined that getting control of the nation's
bloated debt load - which Bloomberg Businessweek says is an estimated 76
percent of gross domestic product in 2013 - could be worth the short-term pain.
Imposing sequestration would likely reduce that figure to about 58 percent by
But predictions of just how much pain we are talking about vary. According to
the Congressional Budget Office, the cuts and tax hikes would likely obliterate
over 2 million jobs in the first year alone, driving up unemployment a full
percentage point and reducing the nation's Gross Domestic Product by $215
billion. Another report released in October by the National Manufacturers
Association is even more dire, saying the cuts and tax changes would lead to a
total fiscal contraction of 3.2 percent of GDP, costing over 6 million jobs by
the end of 2014 and driving the nation's unemployment rate over 11 percent. The
NAM report said concern over the impending cuts has already cost a million jobs
this year, while a Washington Post story on Oct. 25 said that anxiety about the
fiscal cliff may shave a half point off national fiscal growth in the fourth
quarter, already just a measly 2 percent.
It is a stark possibility, not one lawmakers like California Senate President
Darrell Steinberg (D) relish trying to navigate.
"The California Legislature has made tough decisions over the past four
years to attack the state's $42 billion deficit," he said in an email to
SNCJ. "To avoid as much harm as possible to the poor and middle class,
we've tried to make those necessary cuts with a scalpel; sequestration is a
The National Conference of State Legislatures reports that several states have
taken steps to cushion such a blow. Some, such as Virginia, have been
squirreling away funds that might be needed to backfill state-federal programs
that are cut. Most others are developing contingency plans that attempt to
mitigate the loss of federal support.
Whether Congress will act to prevent sequestration from happening is yet to be
determined. A bipartisan group of senators led by Sen. Mark Warner (D-VA) and
Sen. Saxby Chambliss (R-GA) has continued working on a plan to avoid
sequestration, but the so-called "Gang of Eight" has yet to produce
anything of note. Warner, however, remains optimistic a deal will get done,
telling reporters on Oct. 23 that "I do believe that we will avoid
sequestration." The last chance for that will come in the lame-duck
session after the election, although there have been some, Bill Clinton among
them, who have speculated that the lame-duck Congress might postpone the
sequestration process and kick the can down the road to the new Congress.
States face a plethora of other significant challenges regardless of what
Congress does or does not do to right the federal house. California and
Illinois, to name just two, have serious problems with underfunded public
employee pensions. Numerous states have yet to act on creating health care
exchanges as required by the Affordable Care Act, gambling instead on a change
in the U.S. Senate and White House that will allow them to sweep the law away.
New York is one of several states wrestling with the pros and cons of hydraulic
fracturing, or "fracking," a highly controversial procedure for
extracting natural gas and oil deposits from within deep shale deposits.
Perpetual battles loom over women's health issues, particularly abortion. Most
states have serious infrastructure funding shortfalls.
The list goes on and on, as seemingly has this election cycle. To many, we are
now in a state of perpetual campaigns when elections rarely seem to actually
settle government institutions and focus their efforts on dealing with the
treacherous, difficult issues at hand.
It has become enormously frustrating to all but the most passionately involved,
leaving them, in the words of voters like North Carolina resident Jillian
Tullis, "counting the days until this election is over."
A registered Democrat, Tullis is also a self-described "pragmatist"
not wedded to voting a straight party ticket. She says she paid great attention
early on to what the candidates had to say, eager to hear their position on the
issues. But as each grueling month has worn on, as each wave of attack ads has rolled
out, she now says she is "just ready for this to all be over."
She is not alone. Aside from contributing to voters' growing cynicism about
government, this election has for too long given lawmakers and others tasked
with solving the nation's many problems a ready-made excuse for not getting
that job done. It is not the first time that election-year politics has impeded
substantive action, nor will it likely be the last. But many people rightfully
fear that hyper-partisan gridlock has become the new normal, certainly in
Congress and now increasingly in statehouses. Governing has become a zero sum
game where it is seemingly not enough for one party to come out ahead on an
issue - the only real victory is one where the opposition is also utterly defeated.
Outcomes that even partially spread the benefit around are almost nonexistent,
and losing rarely means the two sides just accept the results and move on.
Anyone who has witnessed recent events in states like Wisconsin would be
hard-pressed to disagree.
They would also be hard-pressed to say such constant political warfare makes
for better government. No better example exists than the failed "super
In such an environment, it is easy to see how a person like Tullis finds it
hard to be optimistic for the immediate future no matter who wins the White
House, Congress or even her own state legislature.
"I really want to be hopeful. I really do," she says. "But right
now there is not a lot of evidence that things will change."
For Tullis' sake and ours, let us hope she is wrong. The consequences of
continued business as usual - be it in Congress or in our own statehouses - are
far too serious to ignore.
Watch an interview of Rich Ehisen discussing state pension reform.
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