News / USA

Sequestration Effects Will Reach Beyond US Borders

Senate Finance Committee Chairman Sen. Max Baucus, fends off reporters as he arrives to meet in the Capitol Hill office of Sen. John Kerry, and other Supercommittee members in Washington, Nov. 21, 2011
Senate Finance Committee Chairman Sen. Max Baucus, fends off reporters as he arrives to meet in the Capitol Hill office of Sen. John Kerry, and other Supercommittee members in Washington, Nov. 21, 2011

Now that the bipartisan congressional "supercommittee" has failed to agree on a plan to cut $1.2 trillion from the U.S. government's deficit, across-the-board budget cuts - $600 billion from domestic agencies, $600 billion from the Department of Defense - are expected to go into effect automatically, beginning in 2013.  The automatic cuts, called sequestration, were part of the August debt agreement that created the supercommittee - and they have many policy specialists concerned.  Sequestration would affect not only U.S. citizens, but citizens of other nations, as agencies dealing in defense, foreign aid, foreign trade, and immigration suffer budget cuts.

What Happens if the supercommittee fails?

    - $1.2 billion in cuts split equally between defense and non-defense spending are triggered.

    - Estimated at $55 billion in each type of spending per year from 2013 through 2021.

    - Social Security, Medicare, and other programs exempt from cuts.

    - U.S. Defense Secretary Leon Panetta warns cuts could leave U.S. military with its smallest ground force since 1940s.

    -The automatic spending reductions are known as "sequestration."

U.S. Defense Secretary Leon Panetta has repeatedly expressed his fear that cuts to the Pentagon budget will force job cuts among civilian positions and historic reductions in ground forces.

Some lawmakers are already pledging to find a way to avoid sequestration - but U.S. President Barack Obama said on Monday that he will veto any legislation designed to avoid the cuts without providing the required deficit-cutting plan.

Sequestration could have a heavy impact on organizations that rely on U.S. government funding to provide foreign aid, after years of strain to provide services in a weak global economy. Katie Porter, the deputy director of government relations for the aid agency CARE, says cuts would have a deep impact on CARE's work in the Horn of Africa, where it serves refugees from violence and famine.

"When you think about a 20 percent reduction or more in those assistance funds, not just emergency food assistance but development, the tools we use to help individuals prepare for future disasters, that will have a tremendous impact on the million-plus people we're currently serving," Porter said.

Marianne Rowden, president and CEO of the American Association of Importers and Exporters, says the cuts could also have a significant effect on foreign trade. She says it remains to be seen whether the federal border control agency will be affected by the cuts or, as a part of the U.S. Department of Homeland Security, will be exempted under a provision protecting agencies dealing with national security.

She says the Food and Drug Administration could react to budget cuts on import and export regulation by charging importers and exporters "user fees" for regulatory services. But she says she believes the effect of the automatic cuts would be nearly universally negative.

"I think the automatic cuts, while I understand where they're coming from, that if politicians cannot compromise, everybody's going to sacrifice," Rowden said.

Brittney Nystrom, director of policy and legal affairs at the National Immigration Forum, says this crisis could take valuable funding from programs that are already suffering. On the other hand, she says, sequestration could foster desirable cuts in immigration-related programs that she says are over-funded anyway.

"It's my opinion that there are actually several places that could benefit from a reassessment in terms of what we're getting for the money we're spending," Nystrom said.

She says big savings could result from reforms to the immigration detention system. Nystrom adds that the system could substantially reduce the 400,000 people it processes each year by detaining only people who are flight risks and not those who abide by the law.

In the 13 months between now and the time the cuts go into effect, Congress could still come up with a workable plan to cut the required $1.2 trillion from the deficit and avoid sequestration. President Obama on Monday expressed hope that will happen. But, at present, uncertainty hangs over Washington.

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