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US House Democrats: Defense Sequester Hurting Economy

May. 15, 2013 - 02:14PM   |  
By JOHN T. BENNETT   |   Comments
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WASHINGTON — Pentagon spending reductions are hurting the US economy more than other spending cuts mandated under sequestration, say House Democrats, who appear poised to inject such effects into the 2014 midterm election narrative.

Citing Congressional Budget Office data, the House Appropriations Committee Democrats’ report projects the first year of the defense and domestic sequestration cuts are on pace to “reduce economic growth at an annual rate of 0.6 [percent] and cost about 750,000 jobs in 2013.”

“Using sequestration to reduce the deficit is counterproductive because it requires 20 [percent] of its spending cuts before the economy is expected to recover, costing jobs and thereby weakening deficit reduction efforts,” states the Democratic report.

And there is no bigger driver than sequestration’s national defense cuts, according to the report, which examines the economic effects of the decade-spanning defense and domestic spending reductions.

The report was released one day after two leading congressional Democrats issued new calls to replace the sequestration cuts with other deficit-reducing measures.

House Democratic Whip Rep. Steny Hoyer of Maryland and Senate Budget Committee Chairwoman Sen. Patty Murray, D-Wash., took to social media on Monday to advocate legislation that would void sequestration through other legislative deficit-paring measures.

Democrats appear poised to use the economic effects of the domestic and defense sequestration cuts as a plank of their 2014 midterm election platform. As the House Democratic report signals, the party’s argument will be Republicans embraced sequestration, thereby handing the GOP ownership of all subsequent economic effects.

Senior defense officials have put the size of the 2013 sequester cut at around $40 billion (from a 2013 baseline budget of $526 billion).

The Democratic report pegs the size of the 2013 reduction at $37 billion.

The House Democrats calculated that US defense spending dropped by 11.5 percent in the first quarter of 2013, which followed a 22.1 percent drop in the fourth quarter of 2012.

“This is the biggest back-to-back reduction in defense spending since the post-Korea drawdown in 1954,” according to the report. “The decline in defense spending has been cited by many economists as the largest drag on broader economic growth.”

The Democrats’ report notes Defense Department officials have put off aircraft carrier deployments to the Middle East, canceled training and maintenance, announced plans to furlough civilian employees, and taken a list of other moves to meet the $37 billion target.

“The significance of degraded readiness is that units, other than those deploying to Afghanistan (e.g., units that may respond to crises in Syria, Iran or the Korean Peninsula), will not have completed the training necessary to conduct the full range of assigned tasks,” the report states.

Notably, some Democratic lawmakers, joined by some Republicans, and defense budget analysts have accused the Pentagon of opting to make high-profile and unnecessary moves under the guise of sequestration to garner the most attention to jolt the political system to undo the cuts. These skeptics believe the Pentagon’s budget is so large it could have enacted less controversial moves to meet its budget-cut requirements.

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