Within the next few weeks, the federal government is expected to make spending cuts that will inevitably hurt legions of small businesses and place thousands of public-sector workers on unemployment lines. And African Americans will most likely feel the brunt of the harshest blows.
If the White House and Congress fail to reach an agreement on how to structure a comprehensive deficit reduction package by March 1, their action – or rather inaction – will trigger automatic defense and domestic spending cuts (excluding Social Security, Medicare and veterans’ benefits) totaling $1.2 trillion. Needless to say, suppliers will lose government contracts while agencies will slash payrolls and services.
So why are we in this jam? For years, Democrats and Republicans have been playing a game of political chicken. The end result has been to “kick the can down the road,” using an overused but apt expression of this travesty.
Just check out how they’ve dealt with pressing fiscal matters. Let’s start with “sequestration,” that process you’ve probably heard over and over again during the past 18 months. It grew out of the failure of the Obama Administration and Congress to exercise their negotiating chops or political will during the debt-ceiling battle of 2011. To end an impasse largely driven by ultra-conservative Tea Party House Republicans, our political leaders in their collective wisdom enacted the Budget Control Act, creating a bipartisan “super committee” to shrink the budget deficit by $1.2 trillion over the next decade. Unable to reach an accord from August to the late November 2011 deadline, members just gave up and then engaged in partisan finger-pointing to assign blame for the group’s ineptitude. The deadline for automatic cuts was then pushed to January 1, 2013 (Remember all that talk about “the fiscal cliff”). After President Obama’s re-election in November 2012, the White House and congressional Republicans once again jousted over the best way to trim the deficit. This time, the GOP caved on taxes and structured an agreement that once again called for delaying across-the-board government spending cuts for another two months.
Mindful of the ticking time bomb and a wimpy recovery – the economy contracted at annualized rate of 0.1% for the fourth quarter of 2012 – Obama said in a press conference on Tuesday that Congress “should at least pass a smaller package of cuts and tax reforms that would delay economically damaging effects of the sequester for a few more months. There is no reason that the jobs of thousands of Americans…should be put in jeopardy.”
If the president and Congress can’t sort out this mess and sequestration goes into effect, it would be devastating to business development and job creation.