It will hurt defense contractors who rely on business from the base — estimated to be as many as 15,000 workers.
It will hurt waitresses and restaurants that rely on base and defense business traffic, not just around the base but throughout the community.
And it’ll hurt the movie theaters and stores where base employees — and those who work at other base-dependent businesses — spend their disposable income.
“Everyone is going to feel this,” said Stephen Fuller, a George Mason University economist who has studied the impact of the $1.2 trillion across-the-board cuts.
Under a 2011 deal between Congress and President Barack Obama, the federal government faces $1.2 trillion in mandatory cuts over the next decade. Half of that would be absorbed by the Defense Department.
Congress could undo the cuts. But many congressional Republicans are signaling that they might let them go through. They say they are so concerned about federal spending that even poorly-thought-out cuts are better than no cuts at all, and they don’t believe the President or the Democratically-controlled Senate will put forth a reasonable plan to cut spending.
Rep. Mike Turner, R-Dayton, does not favor letting the cuts go through, but he said last week that he doesn’t anticipate any last-minute deal to stop them.
“I believe these cuts will happen,” Turner said. “I’ve never seen such a failure of leadership in Washington since I’ve been here. This is outrageous and irresponsible.”
Lost jobs
Last year, an aerospace industries group hired Fuller to do a study on the impact of sequestration. His take: It will cost the nation 2.1 million defense and non-defense jobs, including 40,403 in Ohio. The state can expect to lose 21,280 defense jobs alone, according to Fuller’s prediction.
That estimate is a little kinder now — the Congressional Budget Office recently predicted it would cost the nation 1.5 million jobs — but Fuller predicts it will have a tangible effect on the economy and consumer confidence regardless of how many jobs it impacts.
Companies may not be as willing to hire, not knowing what the future holds. And employees might be a little less free with their income.
Though the defense cuts have attracted the most attention, other programs that fall under the sequester knife would feel an impact as well.
Take the region’s national parks, which include the Dayton Aviation Heritage Area. Because the National Park Service’s biggest expenses are salaries, it’s quite likely employees will see a furlough, Fuller said. That translates to reduced hours, which means fewer tourists and less revenue.
The cuts “will show up in a variety of ways that people haven’t given much thought to,” he said.
A meat ax
Democrats and Republicans alike say that this isn’t an ideal — or even good — way to cut.
“I don’t like the sequester,” House Speaker John Boehner said last week. “I think it’s taking a meat ax to our government, a meat ax to many programs and it will weaken our national defense.”
But Boehner said he favors spending cuts, and says he’s frustrated it’s gotten to this point. The irony is that when the sequester was first proposed, no one thought the trigger would even get pulled.
“This was the poison pill that was so painful that it was going to force Congress to act,” said Michael Gessel of the Dayton Development Coalition. “This is the action President Obama publicly and emphatically stated was not going to happen. And yet here we are, making plans for it to happen.”
It is happening because Republicans and Democrats have opposing visions for tackling the nation’s fiscal problems. Republicans want Democrats to acknowledge that the key drivers of the debt and deficit — entitlement programs of Medicare, Social Security and Medicaid — while Democrats are pushing for more tax revenue.
Both sides have advanced measures aiming at averting the cuts, but there has been no movement. House Republicans argue that the cuts — as painful as they might be — could be their last, best opportunity to force President Obama to address the issue of entitlements.
Some observers are predicting dire consequences that go beyond economic pain if the cuts go through.
Scott Lilly, a former Democratic staff director for the House Appropriations Committee staffer who now works for the left-leaning Center for American Progress, said the cuts could cripple airports, particularly small ones, as the Federal Aviation Administration juggles a schedule with fewer air traffic controllers.
Federal prisoners will be short of the appropriate number of guards — they’re already close to the bone, he said — and “you’re going to be in a situation where the guards are going to be in danger and the prisoners are going to be in danger.”
Courts will face a backlog as well, he predicts. Judges can’t be furloughed, so the cuts will have to be against the bailiffs and jury fees. There won’t be enough marshals to protect judges and juries, he predicts. “I think you’re going to see the court system shut down for periods of time,” he said.
The National Weather Service also could suffer during an era when catastrophic storms are becoming increasingly common. And federal research dollars will contract, meaning those waiting for new medical advances to keep them alive may be out of luck, he said.
“Most Americans, at least the ones I know, have a reasonable expectation that government services will be provided,” said Jim Dyer, a former Republican staff director for the House Appropriations Committee who now works for the Podesta Group, a Washington, D.C., lobbying firm. “When that doesn’t happen, people don’t like it very much.”
Inefficient spending
Not everyone sees the sequester in such apocalyptic terms. Michael Tanner of the Cato Institute said the sequester is a “silly, blunt instrument” but said it is hardly devastating or crippling.
In a column for the libertarian-leaning think tank, he noted that war spending is largely exempt from the sequester and that overall spending even after the cuts is still far greater in 2013 dollars than was spent on average during the Cold War. The discretionary cuts, he said, won’t cap spending overall, and spending over a 10-year period would actually grow by about $90 billion.
“If you flew over the country and dumped money out of an airplane, in the short term it would make people better off,” he said. “The fact is you had to take that money out of the economy…it creates an overhang that destroys jobs in the long term. On the net, government spending is a bad thing, because it takes money out of the productive sector of the economy, the private sector, and then uses it less efficiently.”
The sentiment is shared by many Republicans on Capitol Hill: The government, they say, has a spending problem. The federal debt is around $16.5 trillion and the Congressional Budget Office last week projected that the deficit has dropped to around $845 billion — the first time in four years it has been below $1 trillion. In other words: The government borrows 24 cents of every dollar it spends.
“We have a $3.7 trillion budget and this notion that we can’t make these reductions in spending is unbelievable,” said Sen. Rob Portman, R-Ohio.
Rep. Pat Tiberi, a Republican from Genoa Twp. in suburban Columbus, acknowledged some people will get hurt by the cuts.
“Whether it’s the sequester or entitlement reform, when you have a trillion a year in reduction of spending, there’s going to be pain,” he said. “There’s no way out of the pain — whether you fix entitlement programs or there are more cuts to discretionary spending, people will feel pain.”
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