A Slowmotion Sequester Hits America's Invisible Poor with Stealth Cuts

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The Guardian

A Slowmotion Sequester Hits America's Invisible Poor with Stealth Cuts

Most of us are not feeling the squeeze on federal spending. That's because the cuts chiefly target those who have least

So far, the much-dreaded "sequester" – some $85bn in federal spending cuts between the end of March and 30 September – hasn't been evident to most Americans. The warnings that issued from the White House and congressional Democrats about its severity – suggesting social security checks might not go out on time and federal highways would go unattended – seem to many to have been overblown. Only lately do FAA furloughs seem to be having some impact on passengers delayed by lines for security checks.

Sure, March's employment report was a big disappointment. Only 88,000 jobs were created, according to the Bureau of Labor Statistic – a mere drop in the bucket of almost 12 million unemployed Americans and 8 million working part-time who'd rather have full-time jobs. The federal government also shed 14,000 full-time jobs in March. State and local governments, dependent on federal money, laid off thousands more. And government contractors downsized.

But it's hard to see any direct connection between the disappointing job numbers and the sequester. After all, government employment has been shrinking for years. And whatever negative effect the sequester may be having on aggregate demand remains unclear.

Take a closer look, though, and Americans are feeling the consequences of the sequester. They just don't know it quite yet.

That's because so much of what the US federal government does affects the nation in a highly local and decentralized way. Federal funds flow into hundreds of thousands of small rivulets that make their way to community housing authorities, state unemployment offices, local school districts, private universities, and companies.

It's almost impossible for anyone at the receiving end to know for sure the sequester is responsible for the lost funding, or lost jobs, or just plain inconvenience.

Brandeis University in Waltham, Massachusetts, for example, is bracing for a cut of about $51m in its $685m of annual federal research grants and contracts. The public schools of Syracuse, New York, will lose over $1m. The Housing Authority of Joliet, Illinois, will take a hit of nearly $900,000. Northrop Grumman Information Systems just issued layoff notices to 26 employees at its plant in Lawton, Oklahoma. Unemployment benefits are being cut in Pennsylvania and Utah.

Taken together, these cuts are significant. But they're so localized, they don't feel as if they're the result of a change in national policy.

A second reason the consequences of the sequester haven't been obvious to most Americans is that a large percentage of the cuts are in programs directed at the poor – and America's poor are often invisible.

The Salt Lake Community Action Program, for example, recently closed a food pantry in Murray, Utah, serving more than 1,000 needy people every month. The Southeast Alaska Regional Health Consortium is closing a center that gives alcohol and drug treatment to Native Alaskans. Some 1,700 poor families in and around Sacramento, California are likely to lose housing vouchers that pay part of their rents. More than 180 students are likely to be dropped from a Head Start program run by the Cincinnati-Hamilton County (Ohio) Community Action Agency.

All across America, food pantries and community centers catering to the poor are laying off staff, reducing services, or closing. But most Americans don't know anything about this because the poor live in different places than the middle class. Poverty has become ever more concentrated geographically in America.

A final reason much of the sequester is invisible is that many employees are being "furloughed" rather than fired. "Furlough" is a euphemism for working shorter workweeks and taking pay cuts.

Two thousand civilian employees at the Army Research Lab in Maryland, for example, are being subject to one-day-per-week furloughs starting this week, resulting in a 20% drop in pay. The Hancock Field Air National Guard Base is furloughing 280 workers. Many federal courts are now closed on Fridays.

Furloughs arguably spread the pain. Mass layoffs would be far harder to swallow.

For all these reasons, the sequester hasn't been particularly visible. Yet, in coming months, it will spread on a much larger scale. The cuts will be bigger and they'll affect more people. Although still decentralized and localized, largely affecting the poor, and often in the form of furloughs and pay cuts rather than layoffs, the sheer scale of the coming cuts may make them far more apparent.

Robert Reich

Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, Aftershock: The Next Economy and America’s Future; The Work of Nations; Locked in the Cabinet; Supercapitalism; and his newest, Beyond Outrage. His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org.

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