Wednesday, February 20, 2013

The Sequestration Impass

The idea Wash can't cut <3% from a 3plus trillion $ budget Is ludicrous! Trick of listing worst cuts oldest budget game in book.
      I worked under Jack Welch while at GE. Routinely, he would mandate 5% or greater across the board cuts.  We insisted our operations were efficient and had no room to cut.  BUT, we cut by prioritizing our work, eliminating the least necessary, and readjusting work loads.

      EVERY organization over time gathers unnecessary tasks, because for self-preservation every employee works hard to justify his/her job and finds stuff that "needs to be done."  Just like inventories always increase to available space to store it.  Work always expands to available people to do it.
      Anyone who has ever worked for a government organization is quite aware of the dictum that says "spend it or lose it." Whether the money is needed or not, it gets spent.  Government is heavily blotted and needs a serious diet.  The sequestration is just the start.
       We like to remind people of a little Tennessee political history, which has overtones similar to our federal malaise.  Phil Bredesen became governor amidst a fiscal crisis, with a predicted state budget shortfall of $800 million. Much of the budget shortfall was due to TennCare, which was $650 million over budget. His predecessor, Don Sundquist, had hoped to remedy the budget shortfall by implementing an income tax, but this proved wildly unpopular and was never enacted. As punishment Sunquist closed the State parks.  Phil Valentine describes this action in his book "Tax Revolt: The Rebellion Against an Overbearing, Bloated, Arrogant, and Abusive Government."
       Bredesen argued that in order to fix the budget, services would have to be cut, later stating, "you can't have Massachusetts services and Tennessee taxes." In 2003, he signed a 9% across-the-board spending cut. In 2004, he enacted a series of changes to TennCare, essentially removing 191,000 Medicaid-eligible patients and reducing benefits. By 2006, these changes had reduced the program's cost by more than $500 million.
      The Republican needs to hold the line and make the sequestration happen.  In politics cost cutting never comes easy. Legislators are not sent to DC to bring home less pork. Attitudes must be forced to change. After the forced cuts, it is likely government agencies will re-prioritize and get the necessary work done. 

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