Spending cuts' full brunt yet to be felt
By Adam Smeltz
Published: Sunday, April 21, 2013, 11:00 p.m.
The White House warnings were dire, threatening sucker punches to the social safety net and bureaucratic logjams that would menace daily life.
Air traffic would bog down in major cities. A few hundred teachers in Pennsylvania could lose their jobs. Furloughs at military bases would whittle down paychecks for blue-collar families and siphon millions from their communities.
But seven weeks after so-called sequestration took hold, the reality of federal spending controls in Western Pennsylvania isn't so clear-cut — mired instead in Washington politics and the muddiness of ongoing budget negotiations on Capitol Hill.
“There's still a sense in the administration of cutting a deal with Republicans to mitigate some consequences of the sequestration,” said James Savage, a professor of politics at the University of Virginia. “So they're not fully engaging in the process of sequestration.”
The series of reductions known as sequestration took effect on March 1 as a provision of the Budget Control Act of 2011, meant to draw down the deficit by $1.2 trillion over 10 years. Cuts began because President Obama and Republican congressional leaders could not reach a budget compromise.
Sequestration will slow planned increases in federal spending by $85 billion to $92 billion each year, through 2021. Yet the federal budget is expected to rise to $5.9 trillion by 2023, according to the Congressional Budget Office. The anticipated $3.6 trillion in spending for this fiscal year is about on par with 2012 levels.
Savage said “an administration hang-up against implementing the cuts” has kept reductions of 5.3 percent to 7.9 percent for discretionary and defense spending from taking full effect, leaving hundreds of public schools, economic development and human service programs hanging in budgetary limbo.
For Defense, student aid and other government agencies that rely heavily on federal money, the cuts snapped into sharper view. The Allegheny County Housing Authority laid off 13 of about 170 workers on March 15 and will issue 300 fewer vouchers this year for Section 8 housing assistance, said Executive Director Frank Aggazio.
The authority helps more than 8,000 families each year; 5,500 receive vouchers to cover rent payments, and 3,200 live in authority-owned buildings. In Beaver County, sequestration forced 25 people from a pre-approved list for housing vouchers and back into a queue that can run 18 months.
“You've got to make tough choices on deferring some maintenance projects. There's an impact there because you're not paying a private-sector contractor or private-sector vendors or suppliers,” said Aggazio, who scaled back landscaping and other aesthetic upkeep. “They put money back into the economy.”
Living within means
The Pennsylvania economy would take another hit from the furloughs of 26,000 civilian military employees, estimated to lose about $150 million in gross pay because of sequestration, Obama's administration warned in February.
Furloughs for state National Guard workers, including about 300 at the 171st Air Refueling Wing in Coraopolis, could run one day a week for 14 weeks in the fiscal cycle that begins at the end of this month, said Staff Sgt. Matt Jones.
Yet he said National Guard members are waiting to learn when the furloughs will begin. Maintenance and training budgets would be trimmed, as well, said Jones, a spokesman at Fort Indiantown Gap.
“It really would decrease their readiness to respond to a real-world mission,” although “it wouldn't make us unable to respond to anything,” Jones said. He said the Guard has financial advisers available to help members weather a pay cut.
Transit and police agencies — including the state Department of Transportation, Port Authority of Allegheny County and Pittsburgh Bureau of Police — will escape sequestration mostly untouched because they depend on other revenue sources, representatives said.
The Pittsburgh Housing Authority is using attrition and might dip into reserves to cover a $9.2 million federal shortfall for 2013. Spokeswoman Michelle Jackson said housing officials could scale back services if sequestration lingers into fall.
“Right now we're not looking at that,” Jackson said. “In the fall, we most definitely will.”
If budget discussions in Washington don't recast the trims, public schools would feel a squeeze when students return from summer vacation, education leaders caution. Federal support for literacy and special-education programs alone could drop by a combined $48 million for Pennsylvania, said Jay Pagni, a budget spokesman for Gov. Tom Corbett.
Corbett pledged the state will not make up any funding shortfalls with in-state taxes.
“This is the federal government's responsibility, and we cannot backfill with state dollars because those state dollars don't exist,” Pagni said.
Plus, he said, “many agencies have seen that they can live within the means and, with adjustments, get through this fiscal year and see what comes down the pike for the next fiscal year.”
Rep. Mike Doyle, D-Forest Hills, isn't so reserved. He castigates sequestration as “the stupidest thing we've ever done.” He said an expected $30 million loss of research money primarily at UPMC, the University of Pittsburgh and Carnegie Mellon University would eat “our seed corn” and might cost the region “some of the best, brightest minds in the world.”
Federal aid available for students studying in Pittsburgh would fall by several million dollars under sequestration, he said.
“These are all things that, over time, are going to have a real impact on our economy in Pittsburgh,” said Doyle, whose office cut expenses by 8 percent. “When the damage is done and it's already too late, it's going to become apparent to the public.”
He and Rep. Tim Murphy, R-Upper St. Clair, suggested better-directed, less-universal spending cuts to tame federal costs. The Senate rebuffed House efforts to replace the sequestration with a more tailored approach, said Murphy spokeswoman Amy Larkin.
“I think it's going to go on for a while,” said Savage, the UVA professor, recalling controlled spending in the 1990s. “It wasn't until we started getting big waves of tax revenues as a result of the dot-com bubble in 1997 that we started moving away from spending caps.”
The across-the-board approach can help politicians avoid direct blame for cuts, he said, giving them broad leeway to redirect criticism from voters.
“The more that Congress and the president want to avoid taking responsibility for budget reductions, they may end up relying more on sequestration,” Savage said.
Adam Smeltz is a staff writer for Trib Total Media. He can be reached at 412-380-5676 or email@example.com.
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