Saturday, March 16, 2013

Stalling the Incomplete Recovery

Sequestration is likely to throw many lives off course, but it may also mark the beginning of the end of the bloated Pentagon budget.

How do you gauge the impact of depriving 12,000 low-income California preschoolers of the opportunity to participate in the Head Start program because of budgetary gridlock? 

Or stripping more than half a million people living in poverty of their access to the highly effective Special Supplemental Nutrition Program for Women, Infants and Children?

Even if it’s short-lived, assessing sequestration’s toll may take years. In some cases, lives will change course. Depriving underprivileged kids of the programs that help give them what President Barack Obama likes to call “a fair shot” doesn’t serve the national interest or make any sense.

Neither do many of the other $85 billion in automatic cuts now taking shape as part of sequestration. These budget reductions are bound to do real harm to individual Americans and throw the already sputtering economic recovery off course.

Wait. What recovery?

Good question. While the Great Recession officially ended nearly four years ago, the post-recession recovery never amounted to more than a myth for most Americans. Most of us don’t just feel poorer now. We are poorer. Median household income stood at $50,000 in 2011, a nearly 9 percent decline from 1999.

This is why many progressives asserted in the final months of last year that starting 2013 without a fiscal deal would have meant tripping into a ditch, not tumbling off a cliff. It doesn’t, however, mean there’s no further to sink.

Consider the performance of that unsung but illustrative economic indicator of poor and working class America: Walmart. Even in good times, its sales spike twice a month when most workers get their paychecks. The retail behemoth’s same-store sales rose an anemic 1 percent in the fourth quarter of 2012 from a year earlier, as the U.S. economy overall stayed just about flat.

That was apparently a booming business compared to what Walmart experienced in February in the wake of the payroll tax cut’s expiration. “Sales are a total disaster,” lamented Jerry Murray, Walmart’s vice president of finance and logistics, in a Feb. 12 leaked email obtained by Bloomberg News. Early February marked “the worst start to a month I have seen in my ~7 years with the company.”

Sequestration may further sap Walmart’s sales and its cash-strapped customers. But it may have a bright side if it ultimately helps Washington discover that trimming the Pentagon budget won’t make us less safe.

The automatic cuts now being phased in will trim military spending by $45 billion this year. That may sound scary, but it’s merely a return to the lofty levels reached in 2007, when the Bush administration tried to see if a “surge” would bring peace to Iraq. It didn’t.

The clearest evidence of this newfound military austerity came on the eve of the sequestration’s dawn, when the Navy canceled plans to dispatch a second aircraft carrier to the Persian Gulf.

Depending on how you measure it, the United States spends as little as half a trillion bucks on our military and as much as $930 million every year. This is much more firepower than we need for any legitimate “defense” mission. But there seems to be very little political will in Washington amid all this fiscal angst to do anything about it.

The Pentagon budget doesn’t get much attention, not even during heated elections like the ones we experienced last year. In Washington, military spending cuts rarely figure prominently as a deficit-shrinking solution in polite conversation. The fear of being “soft” on defense seems to render candidates helpless to do anything about our oversized military budget.

Ideally, sequestration will help our leaders see that this great nation isn’t broke. Overspending on the armed forces just creates that illusion.

Emily Schwartz Greco is the managing editor of OtherWords, a non-profit national editorial service run by the Institute for Policy Studies. OtherWords columnist William A. Collins is a former state representative and a former mayor of Norwalk, Connecticut. OtherWords.org