The impact and meaning of sequestration

6:13 PM, Mar 4, 2013   |    comments
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  • Professor Emeritus in economics John Tiemstra at Calvin College
    

GRAND RAPIDS (WZZM) - Republicans and democrats could not come to an financial agreement last week, which means the United States are in sequestration, but if you are confused by the term, you are not alone.

WZZM 13 talked to dozens of people about what sequestration means. The typical response was, "I don't know." That is to say they heard the term and knew it related to government and budget, but didn't fully understand.

The main thing you need to know about the word when it is used by Congress in this context is that it means spending cuts.

John Tiemstra is economics professor emeritus at Calvin College. "The sequester is here. This means the federal budget for the rest of the fiscal year, which goes from now till September 30, is cut by $86 billion," he explains.

$86 billion might not sound like much when the budget deficit is in the trillions, but the cuts to government programs like Head Start, pell grants, air traffic controls, and military can have a real impact.

"The programs that are getting cut are between 5% and 6%," explains Tiemstra. "For most federal programs, that is enough to hurt enough to where you have to reduce employment."

Since sequestration started less than a week ago you might not be feeling the cuts, unless you work for one of the federal programs.

"The question is how much can it be cut before you start to feel a real degradation in government services," says Tiemstra. "When something bad happens, when the spinach is contaminated, everybody says, 'Where was the federal government?'"

With the government in gridlock it is hard to see who is paying the real price.

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