Diary of a Spending Addict: A Costly Game of 'Kick the Can'

The producers of the Civil War, Jim Crow laws, and segregation, proudly present the latest in “Failing to Stand Up for the Little Guy”, or more commonly known as sequestration.  Make no mistake, this is a production and you are the audience, as well as, the victim.

The Harvard Health Guide states that “addiction involves craving for something intensely, loss of control over its use, and continuing involvement with it despite adverse consequences.”  Engaging in the activity more often than in the past, having issues if there is an inability to engage in the activity, or denial of the extent of involvement in the behavior, strongly evidences an addiction .  Hello, federal government, you have a spending addiction.

Addicts fear having to go cold turkey.  The Federal Government is feeding on that fear – safe in the knowledge that sequestration is so undesirable, it would never become a reality.  Of course, if it did – there was a legitimate scapegoat waiting in the wings.  Hardcore pragmatists are an easy target to blame, if and when it sequestration goes into effect.

It sounds reasonable; if Congress and the Administration cannot reach a consensus, there will be an automatic cut of 10% at the beginning of the fiscal year, limiting the cuts to the Department of Defense.  A more sound approach is to apply 10% across the entire Federal budget.  At that point, a serious measure could actually be claimed, rather than a “decent start.”  DoD is an easy target because it does not impact the Democratic base.  The prevailing thought is the GOP cannot stomach the cuts during ongoing wars.  Still, as part of a cure for a “spendaholic”, it represents a good first step.

So, not only did the Obama Administration propose the concept of sequestration, the President signed it into law .  Flashback to September 2012, a Presidential election looming and it must have occurred to many Democrats that while they could probably get away with blaming Republicans for Sequestration, a 10% cut was not going be that painful over a year.  So, raise the alarm, exaggerate the problem, and demand that it is “too dangerous” and “must be forestalled.”  Convince the opposition they will be to blame and then hope they bite.  Chomp down GOP, and delay the problem until March.

Now, with only six months remaining in the fiscal year, and the law mandating the entire 10% be cut still on the books, the effects of sequestration on the public and private sectors will be spectacular.  The headlines will scream – ‘Furloughs for all DoD civilians!’  But wait, just like the Six Million Dollar Man we can make it bigger and better; with some creativity we can exaggerate the pain.  Rather than use the full six months, government can force the DoD to provide a three-month plan.  Then there will be more days off, and it can be spread to contractors (at least those where the penalties will not kick in).  The only political gain to be had from Sequestration will be in the first few weeks of implementation.

 And who is the proverbial little guy in this analysis?  It is the civilian employee.  Not the fat cats paraded out as the devil incarnate during the last election.  They will be at work -  collecting away.  People living paycheck to paycheck, usually in high cost of living areas (i.e. $3.75 gas is cheap, line up) will be impacted the heaviest.  Consider this: a 20% pay cut (remember, it could have been 10% in September),  with pay roll taxes and health care benefits all come out first,  as if it were a full paycheck.  Kicking the can another 3 months down the road, will dictate a 40% pay cut, leaving the little guy – the one the Obama Administration is looking out for - with about a third of his normal pay check to live on.

If the Administration is really interested in helping the little guy and avoiding potential harm to their income and livelihood, then do not make proposals that will harm them, refuse to vote for it, and – absolutely do not sign it into law!  It is time to address the addiction, and sequestration is a good place to start.  In fact, Sequestration should have been implemented on the original schedule and the rest of the budget should get the same treatment.  The sky won’t fall, Henny Penny.  The first step is admitting you have a problem.  The second – fixing it.