The dreaded sequester will hit the federal government on Friday, barring a last-minute bargain. But is this whole sequester thing real, or a mega-hyped event like the Y2K crisis and the Mayan apocalypse?
If you recall, the world didn’t stop spinning in the year 2000 or December 2012, when those two other events came and went without so much as a whimper.
The sequester, though, seems real enough. The White House put out a list of potential travel problems, job cuts, and social program cuts last weekend. The sequester idea is part of several federal laws, including the Budget Control Act of 2011 (or BCA).
So how can it not be real? Let’s examine some key points to see the differences between "Sequester 2013," the Mayan apocalypse of 2012, and the Y2K crisis of 1999.
1. One of the three hyped events is real.
The Y2K crisis came when technical experts realized that many crucial computers that ran massive financial and communications systems didn’t account for years beyond 1999 in its software. Years after the Y2K event, computer publisher IDC estimated spending on Y2K upgrades for computers at $134 billion (yes, billion with a B). Because of the massive spending, we’ll never know if the Y2K threat was real. But we do know that little happened on January 1, 2000, to the world’s computer systems.
The Mayan apocalypse seems to be a hyped event. It was a boon to some tourist destinations and a few websites that catered to "doomsday preppers."
The sequester is a real threat, because absent a new law to replace it or stall its budget cuts, $85 billion in across-the-board spending cuts will be felt, starting in mid-April 2013. The jury is still out about the sequester damage claimed by the White House last weekend. Those estimates really can’t be made until the budget process plays out in March.
2. Is any of this in the Constitution?The Constitution gives Congress the power to enact budget laws. In practice, the executive branch is also part of the process, since the president can veto a budget law. But the sequester itself dates back to the Ronald Reagan era as a budget tool dreamed up by Congress. It’s not in the Constitution.
The last time we checked, Y2K and the Mayan apocalypse weren’t in the Constitution. Thomas Jefferson, like the Mayans, had a keen interest in astronomy but in fact, Jefferson wasn’t in America when the Constitution was written in 1787; he was in France.
3. So why do some people think the sequester is all bark and no bite?
The sequester is part of a bigger budget negotiation that will take place in March over continuing budgeted funding for the federal government.
The next big deadline for Congress, assuming the sequester goes into effect on Friday, is March 27. That’s when stopgap funding for federal government operations runs out and the government faces a shutdown.
The cuts listed in the sequester plan would likely be changed by people in Congress who deal with appropriations. Some cuts may stay in place; others will likely go away. Immediate cuts related to the sequester, like furloughs for civilian workers, wouldn’t happen until a month after that March 27 deadline.
So for now, there’s a lot of bark in the sequester. The bite will be coming at a future date.
4. Is there a benefit from these hyped events?
In the case of Y2K, the huge investment in modernizing computer systems had a long-term benefit. It focused attention on technology at companies and government institutions. And it happened just before the dot-com bubble burst in March 2000. So the $134 billion investment came at a precipitous time.
For the Mayan apocalypse, tourism was up in Mexico and Guatemala, and makers of survival gear profited. But people of Mayan heritage were offended that their culture was turned into a marketing gimmick.
In the long run, some research shows that the sequester cuts, when left intact over the next 10 years, would reduce our federal government’s annual deficit significantly. But Federal Reserve Chairman Ben Bernanke said on Tuesday that the immediate damage of an unchecked sequester would make deficit reduction harder over the next few years. The reason is that the cuts would hurt GDP growth. The possibility of another recession is also hovering over the sequester debate.
5. What would the ancient Mayans think about the sequester?
The Mayans lived in a society run by monarchs and priests, and they had a sophisticated government. But they really didn’t deal in modern currency and bartered with other trade partners outside their region. The words “budget meltdown” would scare them (if they existed in their language), because one of their currency-like barter instruments was chocolate. We’d also have to explain the separation of church and state to them. So they’d likely be confused.
The Mayan apocalypse wasn’t real. And the Y2K had a positive outcome, even if people overreacted to the threat. Our conclusion is that sequester is real, but people will need to watch the big budget brawl in Washington, which will occupy much of March, for the final outcome.
Scott Bomboy is the Editor-In-Chief of the National Constitution Center.
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