Can sequester work? Ask Texas

Many thanks to the political class in Washington for sophisticating our nation’s vocabulary. I can’t say I would routinely use “sequestration” without its inspiration. The concept is presently at our doorstep in the form of automatic federal budget cuts.

A brief review: In 2011, Republicans in Congress would not agree to allow the country to borrow more money (i.e., raise the debt ceiling) unless there was a plan to reduce (1) the national debt in general and (2) annual budget deficits in particular.

So, Congress created a bipartisan “super-committee” to find ways to balance the budget. With appropriate prescience, Congress also provided a fall-back plan in case the super-committee crashed and burned. Plan B consisted of across-the-board budget cuts esoterically-known as sequestration.

Well, the super-committee lacked superpowers to overcome Washington partisanship. Its failure was D.C. comical. Now we face $85 billion in spending reductions. The amount is a laughable one-half of one percent of the $16 trillion we owe, but it’s still creating a stir.

President Obama surrounded himself with public servants last week to sound the alarm. He cited the jobs that will be lost, the services that will stop, the offices that will close. With every rousing cadence, I kept thinking: “That’s the point.”

Every year, we spend more than a trillion dollars more than we take in. We simply don’t have the money to do what we’ve always done. To find out what that’s like, ask a business owner, maybe one in the construction industry, whose revenues dropped 50% in 2009 and then again in 2010.

Of course, jobs got lost, services stopped, offices closed. If some didn’t lose their jobs, all would have lost their jobs. That is, the company would have gone out of business. The same is true for us as a nation.

If some expenses don’t get cut, all will get cut in the form of dollar devaluation, price inflation, slow growth, rising taxes and high unemployment.

True, the government can do something businesses can’t: force its customers to buy more goods and services. But, as a college professor once told me, just because you can do something doesn’t mean you should.

Can this sequester thing work? It has worked for Texas.

In 2003, Texas had revenues to pay for about 90% of its planned expenditures. When Governor Rick Perry presented his budget to the Legislature, it had all zeroes in it, as if to say let every state agency, court and university system justify its existence.

In subsequent lean years, if the revenue estimate from the state’s tax collector was less than the previous budget, Perry and Republican legislators required all departments to show how they planned to reduce expenses.

Perry et. al exempted certain services from reduction, e.g., public education, just like the feds exempted Social Security from the pending sequester. But the assumption was simple: there is always room to trim. The choices will be hard; opponents will cry “draconian”. Still, making hard choices is part of being an adult, part of “sustainable” living.

One can find pet statistics to argue Texas has under-spent itself into sub-Mississippi status. But we certainly don’t hear Texas in the talk about state financial troubles and credit downgrades, something we can’t say for the nation as a whole.

Kevin Thompson writes weekly for The Boerne Star in the Texas hill country. Follow him at http://www.kwt.info.

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1 Response to “Can sequester work? Ask Texas”


  1. 1 doncamp0114 February 27, 2013 at 09:19

    Nice article, Kevin. I would think any organization could reduce spending by at least 2%, even the military, without losing essential services. There is laughable waste in every government program.


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