Likely impacts of the sequester on Georgia

February 24, 2013 21:53 pm

by Bill Dawers · 24 comments

The White House has detailed some state by state impacts of the sequester, which is of course scheduled to kick in on March 1. You can view the reports for all the states or a more detailed report for Georgia (both links via The Washington Post).

A few highlights/lowlights among cuts in Georgia:

Georgia will lose approximately $28.6 million in funding for primary and secondary education, putting around 390 teacher and aide jobs at risk. In addition about 54,000 fewer students would be served and approximately 80 fewer schools would receive funding. In addition, Georgia will lose approximately $17.5 million in funds for about 210 teachers, aides, and staff who help children with disabilities. [...]

Around 2,490 fewer low income students in Georgia would receive aid to help them finance the costs of college and around 890 fewer students will get work-study jobs that help them pay for college. [...]

In Georgia, approximately 37,000 civilian Department of Defense employees would be furloughed, reducing gross pay by around $190.1 million in total. Army: Base operation funding would be cut by about $233 million in Georgia. Air Force: Funding for Air Force operations in Georgia would be cut by about $5 million. [...]

Those cuts to defense spending — the furloughs of civilian government employees and the inevitable cuts to private contractors — are likely to have their biggest impacts in the cities around Georgia’s large army bases.

A few days ago, a Wells Fargo study stated this likelihood plainly:

Smaller towns that host large military bases are probably the most vulnerable areas in the sequestration battle because so much of their economic wellbeing is tied to the continued flow of defense dollars. Georgia is home to three such areas: Columbus, Warner Robbins [sic] and Hinesville.

Those three metro areas are already in pretty poor shape in terms of job creation. While the state as a whole has experienced decent job growth over the past year (1.8 percent overall, 2.5 percent for the private sector), Hinesville has had zero job growth, Warner Robins has lost 300 jobs, and Columbus has lost 1,400.

I posted some other data and links about the likely impact on Georgia a few days ago on my site, and I’m sure we’ll see more reports and predictions this coming week.

If the sequester goes into effect, it seems likely that the nation could slip into recession — that warning is not simply a political scare tactic. But we’re likely to see highly localized effects. Some larger metro areas with less reliance on discretionary federal spending might sustain their current recoveries, but look for real trouble in cities where growth had been fueled by federal spending on defense, the national park system, and the like.

Baker February 24, 2013 at 11:55 pm

First thought: Instead of 390 teacher and teacher aide jobs, what if we cut 390 education “administrator” positions who haven’t seen a student since they were in college?

John Konop February 25, 2013 at 5:37 am

I agree, except if you do not end No Child Left Behind, the school would get even less funds via all the red tape reports, actions……required by law.

We have many issues we are facing it is not as simple as make cuts or no tax increases. Both sides are playing to their base over reality.

First fee and or tax increase on the middle to lower income people hurt your economy the hardest. The payroll tax going back up by 2 percent has already hit consumer spending. When you add in the states like Georgia increasing taxes on cars for middle to lower income people ie google Walmart. March 1 you will see a choke hold on spending because that impacts people who cannot afford it. Also this group on a macro spends and does not save ie hurting consumer spending. This was one of the arguments, ironically that was first made to me in college by a republican professor in college via the taxing tips for bartenders and waitresses years ago…….

That is why cutting tax loopholes is smarter way to increase taxes than killing the middle and lower cases. Btw President Reagan made that point……please do not let facts get in the way some of you feel about an issue.

Two the growth of our country has been based on smart infrastructure spending ie railroads, airports, electronic grid, Internet…….If we stop this it will increase debt via lack of growth….Once again basic economics 101…….

Three, we could find easy cuts like let seniors and government workers buy their drugs at a 60 percent savings with VA pricing instead of tax payers paying the difference. Roll back the policemen of the world foreign policy, decriminalize pot and tax it, end No Child Left Behind,…….btw just the three above suggestions are way bigger cuts than either side has put on the table…….

Finally as I said if we eliminated payroll taxes and instead used a VAT, that would increase consumer spending by middle and lower income people. Instead of a person getting the full FICA and Medicare tax taking out of their check they would instead pay under 9 percent extra for all purchases. That would increase spending for working class people by about 4 percent…..It would effect seniors on the tax side, but the extra revenue would not only protect Medicare, it would slow the growth of increases ie co pays, doctor reimbursements…… via revenue short falls.

Bill Dawers February 25, 2013 at 9:35 am

Baker, I wish it were as easy as shifting where the cuts will be, but the vast majority of the positions you’re talking about are funded by the state or by local school boards, not by the feds. We’ve already seen a significant decrease in education employment at those levels, despite the state’s growing population.

Baker February 25, 2013 at 10:30 am

So why couldn’t the state cut those administrator jobs and then come in and fund the federally funded teacher jobs instead?

John Konop February 25, 2013 at 11:23 am

It would violate NCLB requirements and put more money into jeopardy. It would blow your mind the bs…..requirements mandated by the federal government with NCLB.

Ellynn February 25, 2013 at 2:00 pm

The majority of the federally funded teachers are for Title I (poor and profoundly disablied) funded class rooms. In a school sytems as bloated as the surrounding Altlanta area, doing as you sugest may be possible, maybe not practical but on paper it could be done. BUT in a small rural system (which is over 1/3 of the systems in Georgia, which is already loosing their state fundings for being a ‘poor’ county (some systems up to 10% of their yearly budgets), where combining rural systems is not an option because the gas to bus them 40 miles over to the next school costs more then keeping the school district open, and where the administation totals less then 11 people for the wholle system and who’s total payroll is less then your averag Altanta high school area football coach, what then?

Harry February 25, 2013 at 12:21 am

Shut er down!

jiminga February 25, 2013 at 7:15 am

The sequester “crisis” highlights the problem of giving the federal government too much power. Education is an example; It taxes us and gives back SOME of the money, giving it the power to determine what we teach, who we hire, and what we feed our kids at school. The Dept. of Education and its funding has grown exponentially since it was created, presiding over the constant deterioration of our educational system. Education was always a state and local domain until the progressives took it over.

Just maybe, the sequestration “cuts”, that are not cuts at all, will prod us to take back our responsibilities from the bloated and inefficient big brother.

Mike Hassinger February 25, 2013 at 8:43 am

I love the sequester and want it to happen immediately. And then again next week and the week after that.

SOWEGA February 25, 2013 at 9:18 am

The sequester cut is miniscule…only 2.4% of total federal spending. The problem is that this sequester action barely touches mandatory spending (SS, Medicare, Medicare) and instead falls squarely upon discretionary spending (defense, non-defense). Federal agencies absolutely have the ability to move around funding to avoid the drastic actions they are all outlining – or at least delay it for what is inevitably a replacement agreement in spring/summer. As long as entitlements remain unaddressed as part of a deficit reduction deal, we’ll continue to go through these ridiculous periods of uncertainty.

northside101 February 25, 2013 at 9:23 am

Maybe my math is off, but I think i am correct that an $85 billion cut out of a $3.8 trillion budget is little more than two percent? I mean, couldn’t most of us live with two percent less money if we had to? And is it really a “cut” or is it only a cut in the rate of growth? (Like, we spent $100 billion last year on program ABC and planned to spend $110 billion this year, but we are “cutting” ABC to $105 billion) You know, Washington math is a bit different than the math we learned in high school and college.. as Washington math often is “we are cutting the rate of growth” of a program instead of an absolute reductiion in spending in that program…

joe February 25, 2013 at 12:41 pm

Not all programs are subject to sequestration, so it is not really a 2% cut. It is more like a 10% cut to some and a 0% cut to others. In addition, if programs ABC and DEF are both scheduled to go from $100B to $110B (10% increase), then take a 10% decrease (10% of $110B), then both programs are now at $99B, and managers cannot shift money from ABC to DEF.

Sequestration was designed to be real ugly, and it is. At least the ugly slows spending increases.

saltycracker February 25, 2013 at 9:53 am

The 2% SS withholding was a restoration of a poorly managed insurance payment – reducing pension contributions isn’t always smart…..but calling it a tax ?

Teachers – how about we give those at the principal level and lower a raise, ask all to work until 62 & retire with a 401k while limiting pensions/double dipping to a max. of $120K per ?

Military: Eliminate all but strategic foreign bases before cutting domestic ones.

But the personal impact threat is part of most strategies to maintain public employment empires.

The bottom line is to cut where it hurts the public and the net outcome will be more spending.

gcp February 25, 2013 at 11:14 am

Let’s not forget planes will crash at Briscoe Field because of no air traffic controllers, Kennesaw Mountain will close and thus folks will get fat because they can’t exercise at the park, China will invade the Ga. coast because of all the military cutbacks, all schools will immediately close because teachers will have no teacher aides and of course, no more federal blueberry subsidy. Seriously, this sequester hype is second only to the infamous Y-2k hysteria.

Charlie February 25, 2013 at 11:35 am

From Congressman Westmoreland:

The Sequester Is Not the Solution

With the March 1st deadline just a few days away and no deal in sight, the president’s sequester has pink slips being printed, leaving millions of families uneasy and employers on edge. After all of the speeches and state visits, we still don’t have a plan from the president or Senate Democrats. The campaign rhetoric may have gotten President Obama reelected, but it’s not how you get business done. What the American people need are real solutions, not speeches.

In 2011, the bipartisan plans for the Budget Control Act were presented to the president, and the White House insisted the sequester be included into this plan. In fact, that is one of the reasons I voted against the Budget Control Act. The sequester required that $1.2 trillion in arbitrary, across-the-board cuts be split between defense and non-defense spending. The Secretary of Defense has been saying for over a year that this will “hollow out” our military. The president himself said it’s a “really bad idea,” and his press secretary, Jay Carney, admitted it was the president’s “really bad idea.” But where are the president’s and Senate Democrat’s plans to fix this mess that they created?

House Republicans have passed two bills to replace the president’s sequester – one six months ago and one only six weeks ago. The two bills were the Sequester Replacement Reconciliation Act and the Spending Reduction Act of 2012. These bills focused on cutting wasteful government spending, like duplicates, slush funds, and improper payments, and replacing it with common-sense alternatives.

We can’t tax our way out of this deficit, and we certainly can’t tax Americans more for the president’s bad policy. With America sitting on a debt of over $16 trillion, we need to focus on sensible spending reductions and responsible reforms because we have a spending problem, and the sequester is not the solution.

Joshua Morris February 25, 2013 at 12:37 pm

Sequester some public welfare benefits for people who don’t need them, and we’ll be getting somewhere.

Andre February 25, 2013 at 3:32 pm

I think it is important to note dthat sequester, as defined in the Budget Control Act of 2011, does not cut a dime’s worth of spending from the federal budget. The Budget Control Act of 2011 caps the amount of money the feds can spend each fiscal year from now until 2021.

So what we’re seeing here is politicians of both parties arguing against a cap on spending. They want to spend more of our money without the limits imposed by the Budget Control Act of 2011.

seenbetrdayz February 25, 2013 at 4:02 pm

So basically, instead of a mansion, we have to settle for a luxury condo? Things are looking bleak, for sure.

Andre February 25, 2013 at 4:16 pm

The Budget Control Act 0f 2011, which I would encourage everyone to read, is a 29-page bill that gave Congress the chance to reduce the deficit by $1,500,000,000,000 over the period of fiscal years 2012 to 2021 (page 21).

The Joint Select Committee on Deficit Reduction was charged with this responsibility.

In the absence of a product from the Joint Committee, the Budget Control Act of 2011 sets limits on discretionary spending; for the security category, $686,000,000,000 in new
budget authority in fiscal year 2013; and for the nonsecurity category, $361,000,000,000 in
new budget authority (page 7).

That’s actual language from the Budget Control Act of 2011.

There are no cuts. Congress just cannot spend as much.

Read the bill, folks. It’s all there. This entire debate has been framed in the wrong way.

Joshua Morris February 25, 2013 at 4:31 pm

The travesty is that discretionary spending takes a far larger hit than mandatory spending. Entitlements are where the real money is, and this is where the real cuts should be.

saltycracker February 25, 2013 at 5:17 pm

It is Political BS and scare tactics might work on the general public to get us widening the spread in GDP between 24% spending/ 15% revenue. Weeeeeeee

northside101 February 25, 2013 at 3:57 pm

Thanks for some assistance today on understanding the sequestration and so-called “cuts.” Hard to believe but 50 years ago, when Kennedy was persident, the federal budget was somewhere around 100 billion a year, in a country with perhaps 190 or so million people. Since then, spending has increased about 38-fold, well above our population growth (which has maybe can up 60 percent since then) and even inflation (which hasn’t really been that bad since the Carter presidency). Amazing how difficult is is to cut a mere one percent of the budget…

Lea Thrace February 25, 2013 at 4:19 pm

I’m all for the sequester “cuts.” I just wonder what the “effects” will do to the economy and the weak growth we’ve seen so far.

saltycracker February 25, 2013 at 4:25 pm

2013 Budget = $3.8 T
2012 Budget = $3.7T ($3.54 T spent)

Budget Difference $100 Billion
Sequestration: $85 Billion

It is polit-speak to call it cuts when not spending budgeted amounts.
The solution seems to be adjusting to use the reduced budet money wisely.
Obama is busy running around building a case to increase spending by doing such things as using teachers and the military as fodder. Why won’t he come to D.C. and allocate the money we have ?

Comments on this entry are closed.