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Bipartisan Policy Center Releases New Analysis on the Sequester

Thursday, June 7, 2012

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Washington, D.C. – A well-known group of budget and defense experts released a report Thursday that described the impending sequester of federal spending scheduled to occur on January 2, 2013, as fiscal, economic and national security “folly,” and called for congressional action beginning now to repeal and replace the legislation with a broader fiscal plan that encompasses entitlement and tax reform.

However, the report, entitled, Indefensible: The Sequester’s Mechanics and Adverse Effects on National and Economic Security, notes that defense needs reform: “Although imposition of the sequester will have very significant adverse consequences on our national security, this does not mean that critically needed reforms to the Department of Defense budget and business models should not be undertaken,” the report emphasizes.

“We can have a more effective fighting force at lower cost to the taxpayer,” said former National Security Advisor General James Jones. “Unfortunately, the sequester is not the way to get there.”

The Bipartisan Policy Center’s (BPC) Task Force on Defense Budget and Strategy is co-chaired by General Jones, former Senate Budget Committee Chairman Pete Domenici, and former Agriculture Secretary Dan Glickman. All are BPC Senior Fellows.

The report notes that “the indiscriminate and irrational application of sequester cuts in 2013 will have adverse impacts on our military capabilities and readiness and economic vibrancy” and will do virtually nothing to ease the nation’s long-term debt crisis.

The report concluded that:

  • The sequester will require a 15-percent indiscriminate cut in defense spending for Fiscal Year 2013 that will undermine “U.S. military capabilities and readiness…without accomplishing any sensible and necessary reforms to the defense budget;”
  • The adverse economic impacts of the pending sequester are already being felt in the national economy as businesses attempt to handle the uncertainty of funding that the sequester has caused;
  • The sequester could cost defense- and non-defense-related job losses for more than one million American workers over 2013 and 2014;
  • Costs related to delayed contracts, weapons system procurement confusion and slowdown, and job loss within the fragile American economy could well result in savings in federal spending of far less than the $1.2 trillion that the nine-year sequester has as its goal;
  • Even if the sequester saved as much as it is intended to do, it would delay the nation’s debt from reaching more than 100 percent of Gross Domestic Product by only two years.

The report recommended that lawmakers start now, well before the summer congressional recesses, to put in place a legislative process that would vitiate the sequester and replace it with a process that would impose requirements on Congress to produce a broad-based program of tax reform and entitlement changes that would stabilize the nation’s debt at sustainable levels.

“Congress cannot wait until the lame duck session, or try to cobble together a solution at the last minute as the sequester, expiration of tax cuts, uncompleted appropriations , and the possibility of a debt ceiling increase all land on it in December,” Senator Domenici said. “To wait is to endanger our economy and our defense capabilities.” Click here to read the full report.


Ashley Clark
(202) 637-1456

2012-06-07 00:00:00