“So Be It” Sequesteration: Austerity By Another Name

Terrance Heath

Reports of austerity’s demise are greatly exaggerated. Yes, austerity has been on the ropes recently, since it was revealed the whole thing was based on a sloppy spreadsheet by a couple of academic austerians. Before that the IMF denounced and even apologized for advocating austerity that shrunk economies all over Europe. The U.S. has avoided full on austerity but “de facto” austerity is in effect and worsening. Sequestration, which is basically austerity by another name, could finally push the economy over the cliff, taking millions of American families with it.

The latest evidence of the impact of “de facto” austerity is a widening wealth gap between races.


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Millions of Americans suffered a loss of wealth during the recession and the sluggish recovery that followed. But the last half-decade has proved far worse for black and Hispanic families than for white families, starkly widening the already large gulf in wealth between non-Hispanic white Americans and most minority groups, according to a new study from the Urban Institute.

…The Urban Institute study found that the racial wealth gap yawned during the recession, even as the income gap between white Americans and nonwhite Americans remained stable. As of 2010, white families, on average, earned about $2 for every $1 that black and Hispanic families earned, a ratio that has remained roughly constant for the last 30 years. But when it comes to wealth — as measured by assets, like cash savings, homes and retirement accounts, minus debts, like mortgages and credit card balances — white families have far outpaced black and Hispanic ones. Before the recession, non-Hispanic white families, on average, were about four times as wealthy as nonwhite families, according to the Urban Institute’s analysis of Federal Reserve data. By 2010, whites were about six times as wealthy.

The dollar value of that gap has grown, as well. By the most recent data, the average white family had about $632,000 in wealth, versus $98,000 for black families and $110,000 for Hispanic families.

In response to the Urban Institute Report, conservatives are crowing that minorities have lost the most wealth under Obama.  But the urban Institute report merely reflects a trend that goes all the way back to the housing collapse under the Bush administration, caused by conservative policies.  The housing collapse hit minorities especially hard. Having little in the way of inherited wealth the decline in house prices caused a drop in wealth for an African-American and Latino families, because their homes were their wealth.   Thus the ensuing recession became a depression for African-Americans and Latinos.

But the reason the trend of declining Black and Latino wealth and widening disparities has continues can’t be blamed on President Obama’s policies, because Republicans in Congress have consistently blocked every White House initiative to create jobs and grow the economy, while offering none of their own. (In fact, Republicans seem to have gotten out of the policymaking business entirely.) The result has been what Paul Krugman referred to as “de facto” austerity, as lack of federal aid has caused state and local government to slash bush budgets, putting over 700,000 public sector jobs at risk on the state and local levels.

Those public sector job losses hit African-Americans particularly hard because Blacks are overrepresented in public-sector jobs. That a direct result of “de facto” austerity, driven by conservative obstructionism and ideology, and it’s an important part of the story of the persistence of African-American unemployment, and the sinking of the African-American electorate into economic depression, while the rest of the country is mired in recession. (As with austerity in Europe, the sequester is hurting economic growth.)

It’s austerity written in black and white.

The “So Be It” Sequester

John Boehner, when asked about the public sector jobs that would be killed the GOP’s cuts, famously replied “So be it.” Last week, Congress said basically the same thing to millions of Americans who are struggling with sequestration that so resembles austerity that it really should be considered a rebranding of that same old, tired, failed economic policy.

I’ve been writing for a while now about the devastating consequences sequestration for millions of Americans. Near the top of the list was the impact of  $600 million in sequester cuts on air travel and air safety. Like many other bloggers, I speculated that the prospect of long lines and nightmarish delays at airports nationwide might be enough to jolt Congress into repealing the dumb sequester.

I should have known better. Instead, Congress reached a new — and very “bipartisan” — low, carving out an exception for the FAA and leaving the rest of the destructive sequester cuts intact. 

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We’ve hit a new low.

Two months into the sequester, lawmakers have prioritized flight delays over food assistance. Citing significant concerns about the inconvenience of flight delays caused by the furlough of air-traffic controllers, the Senate unanimously passed a bill to give the Federal Aviation Administration (FAA) the ability to re-direct funds within its budget and shore-up staffing levels. The House passed the measure today 361 to 41.

Meanwhile, lawmakers have done nothing about sequestration’s impact on free meal programs, education, affordable housing, or myriad other services that affect millions of Americans each day.

Welcome to the reality of sequestration and our lawmakers’ lackluster response.

Actually, our lawmakers’ response to this particular crisis was impressive in some of the worse ways imaginable, which Jon Stewart skewered on “The Daily Show.” One was the speed with which Congress acted to find a way around sequestration cuts that inconvenience the well-off. Stewart quipped that Congress acted so quickly that part of the bill Members voted on were hastily written in pencil. In the 19 years that I’ve been in Washington, I’ve never seen Congress move so fast. Ever. 

Second, the FAA vote beats all Congressional records for unmitigated gall that I’m aware of. The consequences of the sequester are myriad and devastating. It’s a slow-motion disaster for millions of Americans who will have to deal with the consequences of deep cuts to programs services they rely upon. Yet, not only did Congress carve out the FAA exemption, and ignore the disastrous impact the sequester’s cuts would have on programs that for the poor, the elderly, and very young children, but most members went straight to the airport to fly home 

Lawmakers headed to catch flights at Washington, D.C. Ronald Reagan National Airport on Friday after passing a bill to end furloughs for air traffic controllers that caused flight delays across the country this week.

Many of them were unsure when they got there if their flights would leave on time, or would be delayed due to the sequester like thousands of other commercial flights in recent days.

“I haven’t checked yet. It wasn’t delayed coming here. I honestly don’t know. I need to look over here (at a flight information monitor),” Rep. Brett Guthrie (R-Ky.) told The Hill as he walked toward a security checkpoint.

Rep. Lee Terry (R-Neb.) had a more definitive answer. He tweeted from the airport:

“I vote to shift funds to stop FAA furloughs and now U.S. AIR says my plane home is delayed. Oh the irony!”

If that doesn’t say “So be it,” to Americans left to suffer the consequences of sequestration — the seniors who won’t be getting meals on wheels anymore, the cancer patients who will have to find somewhere else to go when clinics close, the unemployed Americans who won’t be getting unemployment benefits, the children who won’t be able to go to Head Start anymore, etc. — I don’t know what it. 

I guess it’s nice for Rep. Terry that he can joke about the irony heading for the airport of voting his way out a sequester-driven flight delay. However, Terry eventually flew home to state where 400 children could lose access to Head Start. Sequestration could be a double-whammy on jobs in Nebraska. Sequestration cuts at the USDA could bring Nebraska’s meatpacking industry to a standstill.

Meatpacking doesn’t happen at Schuyler, Crete or anywhere in Nebraska, the nation’s leader in red-meat processing, without federal meat inspectors on site.

With that in mind, Mike Johanns and Deb Fischer joined seven Republican colleagues in the U.S. Senate in seeking assurances Tuesday from Agriculture Secretary Tom Vilsack that meat inspectors will not be furloughed because of the arrival of a budget sequester deadline on Friday.

“We are confident you have the ability to implement sequestration at USDA without jeopardizing the ability of Americans to feed their families and seriously hurting U.S. farmers, meat and poultry production facilities, and workers in those facilities,” their letter said.

Among the other Republican signatures were those of Pat Roberts and Jerry Moran of Kansas and Chuck Grassley of Iowa.

“The comments you have made in the press, to farm groups and at the recent USDA Outlook Forum suggest you view there is a rigid legal duty to furlough all employees at USDA without concern for USDA’s statutory responsibilities,” the senators said, “or for the health and safety of consumers

In light of recent events, the USDA angle could seen be part of a trend of corporations, PAC, unions, and other groups line up to lobby for agencies that impact their industries, interests, and incomes be carved out of sequestration cuts. The beef industry is already predicting expensive disruptions, if furloughs for USDA inspectors leads to plants and meat import stations closing down. Not worries, though. Fourteen groups tied to the farming industry secured secured a sequestration exemption for meat inspectors. Other industries and agencies are already lining up to lobby their way out of sequestration, leaving the most vulnerable to bear the brunt of deep cuts. It’s likely some will succeed with thanks to the same kind of bipartisan support that got the FAA a “Get out of sequestration free” card.

But Democrats should be wary of this particular brand of bipartisanism. Not long ago, the GOP was losing the sequester “blame game.” But a Pew Research Center survey shows the FAA vote has evened the score

At least on one aspect of the required federal spending cuts known as the sequester, the blame game seems to have evened out. A new Pew Research Center survey finds that congressional Republicans and the White House take equal heat for flight delays caused by the cuts.

On Friday, Congress passed and Obama signed legislation giving the agency more flexibility to avoid air traffic controller furloughs. The poll, taken in the midst of that legislative wrangling, found 34 percent of Americans blamed Republicans and 32 percent blamed Obama. Another 10 percent blamed both.

Congressional Republicans made an issue out of the flight delays, accusing Obama of letting them happen for political reasons. While they have also tried to pin the sequester entirely on the White House, that effort never gained much traction. A February Washington Post-Pew Research Center poll found that 45 percent of Americans blamed congressional Republicans for the sequester and 32 percent blamed Obama.

If Democrats continue cooperating with Republicans carve out sequestration exemptions that let corporations and the wealthy avoid the “inconvenient” consequences of arbitrary, across-the-board cuts, Americans will start paying more attention, and may hear the Democrats joining the Republicans in saying “So be it,” to the pain inflicted by sequestration. 

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