WASHINGTON — Get ready for two weeks of intensifying warnings about how crucial, popular government services are about to wither. Many of the threats could come true.
President Barack Obama and congressional Republicans made no progress this past week in heading off $85 billion in budget-wide cuts that automatically start taking effect March 1.
Lacking a bipartisan deal to avoid them and hoping to heap blame and pressure on GOP lawmakers, the administration is offering vivid details about the cuts' consequences: trimmed defense contracts, less secure U.S. embassies, furloughed air traffic controllers.
Past administrations have seldom hesitated to spotlight how budget standoffs would wilt programs the public values.
When a budget fight between President Bill Clinton and congressional Republicans led to two government shutdowns, in 1995 and 1996, some threats came true, like padlocked national parks.
Others did not.
Clinton warned that Medicare recipients might lose medical treatment, feeding programs for the low-income elderly could end and treatment at veterans' hospitals could be curtailed. All continued, thanks to contractors working for IOUs, local governments and charities stepping in and the budget impasse ending before serious damage occurred.
This time, at stake is not a federal shutdown but a range of automatic cuts. Between March 1 and Sept. 30, the remainder of the government's budget year, it would mean reductions of 13 percent for defense programs and 9 percent for other programs, according to the White House budget office.
The cuts, plus nearly $1 trillion more over the coming decade, were concocted two years ago. Administration and congressional bargainers purposely made them so painful that everyone would be forced to reach a grand deficit-cutting compromise to avoid them.
A look at the cuts and the chilling impact the administration says they would have, based on letters and testimony to Congress:
_A key reminder: Social Security, Medicare and veterans' benefits, Medicaid and a host of other benefit programs are exempted. The cuts take effect over a seven-month period; they don't all crash ashore on March 1. If a bipartisan deal to ease them is reached, lawmakers could restore some or all the money retroactively.
_On the other hand: Left in effect, these cuts are real even though their program-by-program impact is unclear. The law limits the administration's flexibility to protect favored initiatives, but the White House has told agencies to avoid cuts presenting "risks to life, safety or health" and to minimize harm to crucial services.
_Defense: Troops at war would be protected, but there'd be fewer Air Force flying hours, less training for some Army units and cuts in naval forces. A $3 billion cut in the military's Tricare health care system could diminish elective care for military families and retirees. And, in a warning to the private defense industry, the Pentagon said it would be "restructuring contracts to reduce their scope and cost."
_Health: The National Institutes of Health would lose $1.6 billion, trimming cancer research and drying up funds for hundreds of other research projects. Health departments would give 424,000 fewer tests for the AIDS virus. More than 373,000 people may not receive mental health services.
_Food and agriculture: About 600,000 low-income pregnant women and new mothers would lose food aid and nutrition education. Meat inspectors could be furloughed up to 15 days, shutting meatpacking plants intermittently and costing up to $10 billion in production losses.
_Homeland Security: Fewer border agents and facilities for detained illegal immigrants. Reduced Coast Guard air and sea operations, furloughed Secret Service agents and weakened efforts against cyberthreats to computer networks. The Federal Emergency Management Agency's disaster relief fund would lose more than $1 billion.
_Education: Seventy thousand Head Start pupils would be removed from the prekindergarten program. Layoffs of 10,000 teachers and thousands of other staffers because of cuts in federal dollars that state and local governments use for schools. Cuts for programs for disabled and other special-needs students.
_Transportation: Most of the Federal Aviation Administration's 47,000 employees would face furloughs, including air traffic controllers, for an average of 11 days.
_Environment: Diminished Environmental Protection Agency monitoring of oil spills, air pollution and hazardous waste. The color-coded air quality forecasting system that keeps schoolchildren and others inside on bad-air days would be curtailed or eliminated. New models of cars and trucks could take longer to reach consumers because the EPA couldn't quickly validate that they meet emissions standards.
_State Department: Slow security improvements at overseas facilities, cuts in economic aid in Afghanistan and malaria control in Africa.
_Internal Revenue Service: Furloughed workers would reduce the IRS' ability to review returns, detect fraud and answer taxpayers' questions. It offered no specifics.
_FBI: Furloughs and a hiring freeze would have the equivalent impact of cutting 2,285 employees, including 775 agents. Every FBI employee would be furloughed 14 workdays.
_Interior Department: Hours and service would be trimmed at all 398 national parks, and up to 128 wildlife refuges could be shuttered. Oil, gas and coal development on public lands and offshore waters would be diminished because the agency would be less able to issue permits, conduct environmental reviews and inspect facilities.
_Labor: More than 3.8 million people jobless for six months or longer could see their unemployment benefits reduced by as much as 9.4 percent. Thousands of veterans would lose job counseling. Fewer Occupational Safety and Health Administration inspectors could mean 1,200 fewer visits to work sites. One million fewer people would get help finding or preparing for new jobs.
_NASA: Nearly $900 million in cuts, including funds to help private companies build capsules to send astronauts to the International Space Station.
_Housing: The Department of Housing and Urban Development said about 125,000 poor households could lose benefits from the agency's Housing Choice Voucher program and risk becoming homeless.
Associated Press writers Seth Borenstein, Dina Cappiello, Matthew Daly, Philip Elliott, Sam Hananel, Mary Clare Jalonick, Richard Lardner, Joan Lowy, Andrew Miga, Lauran Neergaard, Stephen Ohlemacher and Pete Yost contributed to this report.
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The U.S. incarcerates its citizens at a rate roughly <a href="http://www.parade.com/news/2009/03/why-we-must-fix-our-prisons.html" target="_hplink">five times higher than the global average</a>. We have about 5 percent of the world's population, but 25 percent of its prisoners, according to The Economist,. This status quo costs our local, state and federal governments a combined $68 billion a year -- all of which becomes a federal problem during recessions, when states look to Washington for fiscal relief. Over the standard 10-year budget window used in Congress, that's a $680 billion hit to the deficit. Solving longstanding prison problems -- releasing elderly convicts unlikely to commit crimes, offering treatment or counseling as an alternative to prison for non-violent offenders, slightly shortening the sentences of well-behaved inmates, and substituting probation for more jail-time -- would do wonders for government spending.
End Of The Drug War
The federal government spends more than <a href="http://www.cbsnews.com/8301-18563_162-20072096.html" target="_hplink">$15 billion a year</a> investigating and prosecuting the War on Drugs. That's $150 billion in Washington budget-speak, and it doesn't include the far higher costs of incarcerating millions of people for doing drugs. This money isn't getting the government the results it wants. As drug war budgets balloon, drug use escalates. Ending the Drug War offers the government two separate budget boons. In addition to saving all the money spending investigating, prosecuting and incarcerating drug offenders, Uncle Sam could actually regulate and tax drugs like marijuana, generating new revenue. Studies by pot legalization advocates indicate that fully legalizing weed in California would yield <a href="http://canorml.org/background/CA_legalization2.html" target="_hplink">up to $18 billion annually</a> for that state's government alone. For the feds, the benefits are even sweeter.
Let Medicare Negotiate With Big Pharma
The U.S. has <a href="http://www.reuters.com/article/2009/06/01/us-healthcare-costs-sb-idUSTRE5504Z320090601" target="_hplink">higher health care costs than any other country</a>. We spend over 15 percent of our total economic output each year on health care -- roughly 50 percent more than Canada, and double what the U.K. spends. Why? The American private health care system is inefficient, and the intellectual property rules involving medication in the U.S. can make prescription drugs much more expensive than in other countries. Medicare currently spends about $50 billion a year on prescription drugs. According to economist Dean Baker, <a href="http://www.cepr.net/documents/publications/intellectual_property_2004_09.pdf" target="_hplink">Americans spend roughly 10 times more than they need to</a> on prescription drugs as a result of our unique intellectual property standards. These savings for the government, of course, would come from the pockets of major pharmaceutical companies, currently among the most profitable corporations the world has ever known. They also exercise tremendous clout inside the Beltway. President Barack Obama even <a href="http://www.huffingtonpost.com/2012/09/02/barack-obama-politics_n_1847947.html" target="_hplink">guaranteed drug companies more restrictive -- and lucrative -- intellectual property standards</a> in order to garner their support for the Affordable Care Act.
Offshore Tax Havens
The U.S. Treasury Department estimates that it loses about <a href="http://www.ctj.org/pdf/stopact.pdf" target="_hplink">$100 billion a year</a> in revenue due to offshore tax haven abuses. Sen. Carl Levin (D-Mich.) has been pushing legislation for years to rein in this absurd tax maneuvering, but corporate lobbying on Capitol Hill has prevented the bill from becoming law.
Deprivatize Government Contract Work
In recent years, the federal government has privatized an enormous portion of public projects to government contractors. Over the past decade, the federal government's staffing has held steady, while the number of federal contractors has <a href="http://pogoarchives.org/m/co/igf/bad-business-report-only-2011.pdf" target="_hplink">increased by millions</a>. This outsourcing has resulted in much higher costs for the government than would be incurred by simply doing the work in-house. On average, contractors are paid <a href="http://pogoarchives.org/m/co/igf/bad-business-report-only-2011.pdf" target="_hplink">nearly double</a> what a comparable federal employee would receive for the same job, according to the Project On Government Oversight.
Print More Money
There's an old saying in economics: You have to print money to make money. <a href="http://www.huffingtonpost.com/2012/10/09/underwear-sales-growth-economy_n_1952214.html" target="_hplink">Okay, there's no such saying</a>. Nevertheless, the great boogeyman of many conservative economic doctrines -- inflation -- isn't such a bad idea during periods where much of the citizenry is drowning in debt. Inflation is by no means a perfect remedy: it's a stealth cut to workers' wages. But it also has many benefits that are often unacknowledged by the Washington intelligentsia. Inflation makes housing debt, student loan debt and any other private-sector debt more manageable. Today, when <a href="http://www.corelogic.com/about-us/researchtrends/asset_upload_file448_16434.pdf" target="_hplink">10.8 million</a> homes are underwater -- meaning borrowers owe banks than their houses are worth, moderate inflation could ease that debt burden. By effectively reducing monthly bills, moderate inflation could actually put more money in the pockets of these homeowners to spend elsewhere, thus stimulating the economy. Moderate inflation -- 5 percent or so -- could also help alleviate the <a href="http://www.cbsnews.com/8301-505145_162-57555780/student-loan-debt-nears-$1-trillion-is-it-the-new-subprime/" target="_hplink">$1 trillion</a> in student debt currently plaguing America's graduates. Make no mistake -- hyperinflation of 20 percent, 30 percent or more -- is bad. But the U.S. has ways to crush inflation when it gets out of hand, as proven by the Federal Reserve under then-Chairman Paul Volcker in the early-1980s.
Print Less Money
The government prints a <em>lot</em> of $1 bills. But it turns out that minting $1 coins is much, much cheaper. Over the course of 30 years, the government could save $4.4 billion by switching from dollar bills to dollar coins. Here's looking at you, <a href="http://www.usmint.gov/mint_programs/nativeamerican/" target="_hplink">Sacagawea</a>.
Immigration: Less Detention, More Ankle Bracelets
The government spends <a href="http://newamericamedia.org/2012/04/ice-slow-to-embrace-alternatives-to-immigrant-detention.php" target="_hplink"> $122 per person, per day</a> detaining immigrants who are considered safe and unlikely to commit crimes. The government has plenty of other options available to monitor such people, at a cost of as little as $15 per person. For the first 205 years of America's existence, there was no federal system for detaining immigrants. The process began in 1981.
Financial Speculation Tax
Wall Street loves to gamble. In good times, financial speculation is the source of tremendous profits in America's banking system, but when the bets go bad, the government picks up the tab, as evidenced by the epic bank bailouts of 2008 and 2009. Unfortunately, this speculation is difficult to define in legalistic terminology and even more difficult to police. One solution? By taxing every financial trade at the ultra-low rate of 0.25 percent, the U.S. government can impose a modest incentive against gambling for the sheer sake of gambling. If there's an immediate cost to placing a bet, a lot of traders will choose not to bet. What's more, this tax could raise about <a href="http://www.ips-dc.org/media/why_a_financial_transaction_tax" target="_hplink">$150 billion a year</a> for the federal government.
Taxing greenhouse gases would generate $80 billion a year right now, and up to $310 billion a year by 2050, <a href="http://www.brookings.edu/research/papers/2012/07/carbon-tax-mckibbin-morris-wilcoxen" target="_hplink">according to an analysis by the Brookings Institution</a>. It would also help avert catastrophic ecological and economic damage from climate change.