The obvious reason as to why America’s economic situation is far from “booming” today, is the recent recession, which started in 2007, said Joan Huffer, director of the Federal Budget Initiative at the Center on Budget and Policy Priorities.
But the recent sequestration of the federal budget, which was enacted March 1 after being postponed since Jan. 1, means spending cuts were made across the board.
“Georgia got back about half the jobs lost but [the state] still has a ways to climb out, and cuts will make things slow down,” she said Wednesday at the Georgia Budget & Policy Institute Spring Policy Forum at the Carter Center near downtown Atlanta.
Each federally funded program is being cut by 5 percent this year and a total of $1 trillion will be cut in the remaining eight years of the sequestration, Huffer said.
Georgia annually receives $11.3 billion in federal funds, which go to programs like Medicaid and PeachCare, education services including nutrition and disabilities, the Department of Transportation, as well as child welfare, elder services, Temporary Assistance for Needy Families and other human services.
“[Sequestration] is a terrible budgeting concept. It hits people way too much in the short term. … That message is not getting through,” Huffer said. “The idea was this [sequestration] is so terrible, it would keep everyone at the table to discuss, and that didn’t work.”
Georgia Budget and Policy Institute Executive Director Alan Essig said Georgia is recovering from the recession at a “sluggish” pace.
“Federal budget woes are just making a difficult situation even more challenging than it is. … A lot of people don’t realize federal funds are really important to the state,” he said. “It’s a really important time in the next two years to talk about Georgia budget issues.”
Huffer believes budget cuts should not be made in the short term, she said, because the economy is too weak right now.
“But we can and should start to make changes to go into effect later to reduce the rate of growth of debt and deficit,” she said.
As a resolution, the U.S. House of Representatives passed the Paul Ryan Budget with the goal of achieving a budget balance over the next 10 years, Huffer said, and would cut domestic spending by $6.2 trillion, including $355 billion from Medicare and Medicaid and other health programs by $2.6 trillion.
The Senate, however, took a different direction and passed the Patty Murray Budget, which would reduce the deficit by $1.85 trillion, she said, with half from spending cuts and half from revenues, and no significant changes in Medicaid.
“They will try to resolve the difference between the House and Senate budget resolutions, but unfortunately these big budget decisions are only made during crises,” Huffer said.
Therefore, she said the only way to get rid of the sequestration is to “build political pressure.”
She stressed the importance of the local public to reach out to their U.S. senators or representatives to express how sequestration is creating “real impacts on real people at the state level,” Huffer said.
“We’ve got to tell our story,” she said.