Sequestration is being mis-sold

Almost everywhere you read about sequestration, there are pundits talking about present-tense cuts. While America needs these (its debt-to-GDP ratio passed 100 per cent at the end of 2012), that's not what the sequester brings. Cuts to spending seem large, but they're cuts to planned spending. The size of the state won't shrink as a result.

For an idea of the numbers involved, Julian Harris writes for us:

The initial $85bn applies to the next seven months, yet the total amount of automatic cuts – known as sequestration – would be $1.2 trillion over the subsequent decade, unless politicians come up with an alternative budget plan in the meantime.

(Full article)

And businesses have been planning for these planned and well announced reductions in future spending. James Blom of OhioHealth said this in a recent interview:

We’re very cost-efficient as an organization. It was just one other element as we were preparing for this fiscal year. We’ve got Medicaid cuts coming [from the 2010 health care law reductions to Medicaid disproportionate share payments] too, so you just throw all of that into the mix and you just prepare.

We do a five-year financial forecast every year, and we take very conservative assumptions on that forecast. So we’ve been thinking about Medicare cuts, Medicaid cuts, employers being a lot more cognizant of their own health care spending as we do our own planning.

(Kaiser Health News)

So the private sector has been readying itself for this eventuality. It's the politicians who are struggling and either through ignorance of what the sequester is, or through willingness to forgo accuracy for political gains, are trying to cause panic. Planned spending might change, but the state will grow. All the sequester could achieve is to slow that growth down a bit.