Vermont will lose 6 percent of current federal funding for state and local programs if Congress and President Barack Obama can’t agree on a new package of tax increases and budget cuts to address the federal government’s looming debt.
That translates into about $15 million in cuts to grants for Vermont, in addition to cutbacks that could affect 6,000 federal employees in the state.
That figure does not include a one day a week furlough for Vermont National Guard employees, cuts to special education and Title 1 programs for schools, and an estimated 11 percent cut to unemployment benefits. There could be reductions in the Low Income Heating Assistance Program, longer wait times at the Canadian border as a result of slashes to the Border Patrol, and 90 minute airline delays because of cuts to air traffic controllers. Funding for community health centers, vocational rehabilitation for developmentally disabled Vermonters, and affordable housing projects will all be slashed under the automatic spending cuts.
The mandatory reductions would eliminate half of all defense spending, hit programs for the poor and lower Medicare payment reimbursements to doctors for care of the elderly.
Congress has one week from Monday to come up with solutions to the problem. President Barack Obama has proposed $1.2 trillion in cuts to federal programs over the next 10 years, according to the Washington Post, and he has insisted that those reductions in entitlement programs be instituted in conjunction with closing tax loopholes for corporations and individuals. Republicans in the House of Representatives, many of who are beholden to Tea Party conservatives who subscribe to the Grover Norquist drown-government-in-a-bath theory approach to “governing,” have refused to budge on potential tax increases for the so-called 1 percent, or wealthiest segment of the American population.
State officials are not sure at this juncture how many Vermonters — federal, state and local employees — will get the axe as a result of the sequester.
Gov. Peter Shumlin, who is now chair of the Democratic Governors Association, met with Obama this weekend to discuss the sequester, along with members of the National Governors Association, which includes state CEOs of both Republican and Democratic parties.
Shumlin said he wasn’t prepared for the stark reality that no alternative to the sequester is forthcoming at this point.
“It’s pretty darn frightening,” Shumlin said. “I sort of figured we’d come down here and hear that, you know, the president firmly believes that these Tea Party folks in Congress were going to come to the table and figure something out, and I guess I’m more pessimistic about that than I was when I came down.”
The governor referred to the Republican members of Congress who support the sequester as “radicals.” The sequester, Shumlin said, “was never supposed to happen.”
“It was intended to be designed as something that would be so horrific to job growth that it would force Congress and the president to work together to come up with some other solution,” Shumlin said.
Instead, he said, the House Republicans are engaged in a dangerous “brinkmanship” that could lead to layoffs in the public and private sectors, hurt state budgets and sink the American economy back into recession just as the nation was beginning to feel the effects of a long-awaited recovery.
The automatic sequester cuts, should they go into effect, would begin on March 4. Because the federal government fiscal year runs from Oct. 1 to Sept. 30, the reductions for all of 2013 would be made over a seven-month period. Shumlin told reporters in a conference call on Sunday that reductions to education spending programs, such as special education and Title 1 programs, are slated for fiscal year 2014. More cuts would come to light in the coming weeks, he said.
The state does not have the resources, the governor said, to shore up federal programs.
“Obviously we’re doing everything we can to put pressure on the Republicans in Congress to come to the table and not push the button a week from Monday on the sequester because the damage to the economy, to our jobs growth, to the fact that we’re finally seeing results in growing our economy would be tragic, and make it really tough on the middle class who is finally seeing some hope.”
The cuts would be “felt across the board,” Shumlin said, for state, local and federal governments. But the specter of another recession that could lead to private sector job losses, anemic real estate sales and consumer skittishness could be even more devastating for Vermont’s economy. Income and corporate tax revenues could drop as a result and create a larger hole in an already difficult to resolve budget and tax conundrum this year.
“What we have to remember is we’re not just talking about border crossings and airports and the National Guard being furloughed and national employees being furloughed, but we’re also talking about a freeze on private sector job growth because one thing business needs is predictability and obviously these artificial road blocks really give me absolutely no confidence that they can be investing in innovation and equipment and the things they need to grow their workforce,” Shumlin said.
The governor said the sequestration is a crisis manufactured by a majority of Republicans in the House of Representatives.
“These folks want to prove a point, and they care more about making their Tea Party base happy than they do about solving a problem and for that they’re willing to push us to the brink,” Shumlin said.
At one point in his 11-minute interview with reporters, he compared the political situation in the United States to that of a Third World country.
“You’d think we were some kind of developing country, some new democracy that just got formed somewhere, and we’re talking about the most extraordinary democracy in the world, the single greatest economic engine of any economy in the world, and these Tea Party folks in Congress keep putting artificial road blocks in place that deter us from what I believe that would otherwise be a robust recovery after the longest recession in history.”
Shumlin described the president’s plan as “balanced” because it forces millionaires and billionaires to pay more in taxes. The proposal, in the governor’s view, is structured so that all Americans make sacrifices to bring the nation back into the black after years of deficit spending to fund the War on Terror in the Middle East. (We are currently spending $1 billion a day in Afghanistan, according to the New York Times.)
The governor said Obama has offered a “perfectly reasonable” solution. Even so, the president’s suggested $1.5 trillion in “balanced” cuts will result in significant reductions to federal programs.
“I gotta tell you, I’m not very happy about the $1.5 trillion in cuts that he’s making, and most people won’t be as a Democrats,” Shumlin said. “They’re definitely going to be tough for the most vulnerable.”
Federal Emergency Management Agency funding for the Waterbury State Office Complex and the Vermont State Hospital would not be affected by the sequester cuts, according to Jeb Spaulding, the secretary of the Agency of Administration.
According to a report from the White House Office of Budget and Management, Vermont can expect the following federal cuts in 2013 if Congress and the president can’t agree on a deficit reduction package (the following information is taken directly from the White House website:
The state will lose approximately $1,128,000 in funding for primary and secondary education, putting around 20 teacher and aide jobs at risk. About 2,000 fewer students would be served and approximately 10 fewer schools would receive funding.
The state would lose approximately $1,440,000 in funds for about 20 teachers, aides, and staff who help children with disabilities.
About 30 low-income college students would lose financial aid and around 100 fewer students will get work-study jobs.
Head Start and Early Head Start services would be eliminated for 100 children in Vermont.
The state would lose about $1,068,000 in environmental funding to ensure clean water and air quality and pollution, and $359,000 in grants for fish and wildlife protection.
Approximately 1,000 civilian Department of Defense employees would be furloughed, reducing gross pay by around $2.9 million in total.
Base operation funding from the Army would be cut by about $1 million.
About $33,000 in Justice Assistance Grants that support law enforcement, prosecution and courts, crime prevention and education, corrections and community corrections, drug treatment and enforcement, and crime victim and witness initiatives will disappear.
Vermont will lose about $101,000 in funding for job search assistance, referral, and placement, and about 3,780 fewer people will get help finding employment.
Up to 100 disadvantaged and vulnerable children could lose access to child care.
Around 760 fewer children will receive vaccines for diseases such as measles, mumps, rubella, tetanus, whooping cough, influenza, and Hepatitis B due to reduced funding for vaccinations of about $52,000.
A loss of $331,000 in funds to help upgrade public health response to threats including infectious diseases, natural disasters, and biological, chemical, nuclear, and radiological events. In addition, Vermont will lose about $270,000 in grants to help prevent and treat substance abuse, resulting in around 500 fewer admissions to substance abuse programs. The Vermont Department of Health will lose about $55,000 resulting in around 1,400 fewer HIV tests.
The state could lose up to $13,000 in funds that provide services to victims of domestic violence, resulting in up to 100 fewer victims being served.
The state would lose approximately $204,000 in funds that provide meals for seniors.
Sen. Tom Harkin, D-Iowa, paints a slightly starker statistical picture for Vermont. Read page 170 of his report on the impact of the sequester on Vermont.
For more information about the impact of sequestration on the states, go to the Pew Center State and Consumer Initiatives website.
CLARIFICATION: The Washington Post reports that the sequester would save $1.2 trillion over a decade; Gov. Peter Shumlin said the cuts would amount to $1.5 trillion.
