The Fiscal Cliff: Mommas Said Knock You Out
By the time President Obama walked off the stage at Chicago’s McCormick Place after delivering his acceptance speech early Wednesday morning, pundits already were screaming HERE COMES THE FISCAL CLIFF!
And while it might have been a nice idea to take a collective breath after such a divisive election season before new screeching began, the pundits were not wrong.
Be warned: The Fiscal Cliff approaches. On Jan. 2, 2013, to be exact.
Now, I am many things, but an economist (or even a person remotely comfortable with numbers) is not one of them. So let me explain to those of you who are like me, in the simplest terms possible, what this proverbial cliff is all about.
In the wake of the debt ceiling crisis last summer, Congress and President Obama agreed to enter into negotiations to enact a 10-year deficit reduction package in excess of $1.2 trillion.
If an agreement could not be reached, a mandatory, across-the-board reduction in spending (also known as “sequester” or “sequestration”) would occur. All discretionary and entitlement spending -- with a few exceptions -- would be subject to sequestration.
Half of the reductions would be drawn from defense funding and the balance from non-defense and entitlement programs. The idea behind the sequestration threat was that it would make the political price so high for both sides that surely Congress and the president would find a common solution.
Unfortunately, no deal has been reached and the United States now faces said “fiscal cliff,” due to sequestration, the expiration of the 2001/2003 tax cuts, and the expiration of other large and expensive programs. There is little doubt that going over the fiscal cliff would plunge the U.S. economy back into recession.
So there’s that, i.e., nobody wants a recession. But we can't fix this problem by increasing poverty -- particularly among the poorest of the poor.
Many of you know that I recently returned from a trip to Ethiopia with ONE Moms, a project of the ONE Campaign that brought a dozen mothers from the U.S. and Europe to visit projects, funded by international aid (much of it from the U.S. and the U.K.) that have made significant and lasting impacts for good on the lives of women and girls.
Under sequestration, the U.S. foreign aid that has made such a tremendous difference in Ethiopia and in the lives of countless millions of desperately poor Africans (and others) is in grave jeopardy.
At the request of Congress, the Office of Management and Budget (OMB) issued a report in mid-September outlining how it would implement the sequester. The program cuts are estimated to be:
- Defense discretionary: 9.4 percent
- Medicare: 2 percent
- All other non-defense mandatory programs: 7.6 percent
- Non-defense discretionary (including the International Affairs Budget): 8.2 percent
The foreign aid I’m talking about falls under that last category – the International Affairs Budget or IAB. Before I throw more numbers at you, it is important to understand that the U.S. budget for foreign aid programs, such as The President’s Emergency Plan for AIDS Relief (aka PEPFAR), the U.S. government’s Global Hunger and Food Security Initiative known as Feed the Future, and other global health initiatives (that have had such an enormous effect in turning the HIV/AIDS pandemic in sub-Saharan Africa of a decade ago into “just” an epidemic) comprise less than 1 percent -- only .75 percent to be more precise -- of the overall U.S. federal budget.
In other words, we (the American people) are not spending very much on foreign aid to begin with, so cutting any of it is a big deal to the poorest of the poor, or the “least of these,” as Jesus so eloquently put it.
For the IAB, OMB estimates that the cuts would total about $4.7 billion in FY2013. No exemptions for IAB are anticipated and there is no flexibility permitted to protect certain programs (such as PEPFAR, Feed the Future, etc.) by cutting other programs more deeply.
Those $4.7 billion cuts would mean:
- Global Health programs would be cut by $670 million from FY2012 levels.
- USAID’s development programs would be cut by $207 million.
- MCC would be reduced by $74 million.
- Feed the Future agriculture and nutrition programs would be cut by $98 million.
- Emergency food aid would be reduced by $120.2 million, and McGovern-Dole Food for Education by $15 million.
- The 8.2 percent cut also would be applied to U.S. contributions to multilateral programs such as the Global Fund to Fight AIDS, Malaria and Tuberculosis, and GAVI.
While we cannot predict exactly how cuts to IAB funding will play out in programs on the ground, we do anticipate that cuts of this magnitude would have a significant impact on international aid programs across the board that would only deepen over time. Sequestration would be applied through FY2021 — leading to continuing deep cuts each year. Congress would have to cut discretionary spending 5-8% each year for the next decade.
According to the American Foundation for AIDS Research (amFAR), the effects of sequestration “on the ground” could mean:
- HIV/AIDS treatment for nearly 400,000 people would not be available, potentially leading to 63,000 more AIDS-related deaths
- 124,000 more children would become orphans by losing their parents to HIV/AIDS.
- 112,500 fewer HIV-positive pregnant women would receive Preventing Mother-to-Child Transmission (PMTCT) services, potentially leading to more than 21,000 infants being infected with HIV.
- 1.3 million fewer pentavalent vaccines for children would be available through GAVI, leading to 14,000 more deaths from diphtheria, tetanus, pertussis, Haemophilus influenza type B, and hepatitis B.
- 2.5 million fewer insecticide-treated nets would be available, potentially leading to 6,500 deaths from malaria; and 3.6 million fewer people would receive treatment.
- 88,000 fewer TB patients would receive treatment, potentially leading to 11,000 more TB deaths.
- 1 million fewer families would have food security and income gains.
- 690,000 fewer children under age 5 would benefit from U.S. nutrition programs and suffer decreased nutrition, many of them facing irreversible developmental damage (stunting) as a result.
We need to tell Congress that in any agreement on deficit reduction, programs (domestic and international) that serve the poor must be exempt from cuts.
Saving ourselves from careening over the fiscal cliff by throwing the poorest of the poor over first is simply not a moral option.
I'll leave you with a quote from a statement released last year by the Circle of Protection about the urgency of protecting the poor and how our budgets are a direct reflection of the condition of our soul as a nation.
As Christians, we believe the moral measure of the debate is how the most poor and vulnerable people fare. We look at every budget proposal from the bottom up — how it treats those Jesus called "the least of these" (Matthew 25:45). They do not have powerful lobbies, but they have the most compelling claim on our consciences and common resources. The Christian community has an obligation to help them be heard, to join with others to insist that programs that serve the most vulnerable in our nation and around the world are protected.
Click HERE to find your U.S. Representatives or Senators and tell them directly via email or phone.
Cathleen Falsani is Web Editor and Director of New Media for Sojourners. Last month, Cathleen traveled to Ethiopia as an expense-paid guest of the ONE Campaign on a listening-and-learning visit to programs and organizations that work primarily with women and girls. Learn more about ONE Moms and the Ethiopia trip HERE. Watch for Cathleen's tweets (and those of her ONE Moms traveling companions) on Twitter with the tag #ONEMOMS.
Photo credit: All photos by Cathleen Falsani for Sojourners. Photos in the video by Karen Walrond for ONE.