Sequestration – No Deal Done, Anybody Shocked

Restored from the Empower Network archive (2011–2017), lightly edited to meet our current advertising standards. Views are the original author’s.

President Obama signed the order as required by law to set in motion the automatic government spending cuts, they’re calling sequestration.  After days and weeks of talk of how devastating these sequestration cuts would be to the economy, financial markets are not reacting negatively. The stock market is at five year highs, they don’t seem to worried.

Carolyn Kaster/Associated Press – President Barack Obama gestures as he speaks to reporters in the White House briefing room in Washington, Friday, March 1, 2013, following a meeting with congressional leaders regarding the automatic spending cuts.

The president continues to blame Congress, specifically Republicans, seriously. Now I agree, there’s plenty of blame to go around, but are we supposed to forget this was the president’s idea. The administration brought the idea of “sequestration” to republican leaders as reported by Newsmax.

It was supported by the White House and Congress.

“Very clearly that was the President’s idea,” Fleming said. “He brought that forward to John Boehner after the failure of the so called big deal, where Boehner kept going to him offering larger and larger amounts of revenue. Of course the President kept pulling back on the goal post. So finally out of desperation Obama advanced this notation that was based on prior legislation from 10 or 20 years ago.

“This would of course cause automatic cuts in areas of defense and the providers of health care if a super committee; a bipartisan, bicameral committee could not come up with a way to cut spending that would reform entitlements. I voted against it frankly, John. The reason is because I saw where it was going to cut just the things that the President wanted cut and it would not reform entitlements.”

The measure passed in the Republican controlled House 269 to 161, with about a third of the GOP in opposition along with half of the Democrats. Six Democrats in the Senate opposed it along with 19 Republicans for a final vote of 74 to 26.

Fleming said with the Bush tax cuts also set to expire Democrats are refusing to bargain to avoid the cuts.

Watch the interview here:

As usual, it’s the blame game. Sequestration is all the republicans fault. Even though we proposed these Draconian cuts as a last resort and even penalty, should both sides not reach a “grand bargain”. Both sides agreed to these devastating spending cuts, but now it’s unthinkable. Does any of this sound familiar. DEJA VUS! These idiots are always desperately trying to save us from the very situations they’ve created.

Are Sequestration Cuts Really That Bad

Well according to Rep. Maxine Waters, 170 million jobs could be lost because of sequestration.  Huh?  You think that’s a little of an exaggeration.  Isn’t that more than the total number of jobs in the United States.  Of course Rep. Waters is always a source of great entertainment.  It’s as absurd as all the other inflammatory claims related to sequestration.  I’m one who agrees it’s not the best approach, but is it as bad as the president asserts.  Probably not.  Many agree it’s not as disastrous as some would have you believe.  It’s time to cut somewhere.  Spending is completely out of control.  These cuts aren’t what I or a lot of people would choose, but they are cuts.  We should start the cuts with foreign aid, which accounts for one percent of the federal budget.  Much of that money goes to countries with corrupt governments, where officials line their pockets, or to countries that don’t like the United States, like the billions we give to Egypt and the Muslim Brotherhood.  Washington talks of domestic programs that are to be cut, yet we continue to dole out billions around the world.

Financial Sector Taking Sequestration in Stride

The stock market is at five-year highs.  Many sectors of the financial markets don’t seem to be reacting.  According to the president the sequestration cuts would cause widespread problems, including airport delays, disruption to public services, and layoffs for millions of government workers.  I’m skeptical of a lot of this rhetoric.  The stock market doesn’t seem worried, as reported by Reuters:

And the so-called sequester might not even stick around long enough to have much of an impact, some analysts said.

“The stock market isn’t worried. It’s at five-year highs, and the sequester gives the Fed all the more reason to keep its foot on the gas,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

President Barack Obama and congressional leaders met in the White House on Friday but did not reach a budget deal. Investors have had a long time to weigh how the sequester could affect growth and most believe it will not trigger a recession.

Either way, I think we’ll all find out very soon.