Cutting Costs Cutting CostsCutting Costs
Inside the effort to improve the efficiency of federal operations.

How the GDP's Big Shrink Might Impact Sequestration

ARCHIVES

U.S. gross domestic product fell by 0.1 percent in 2012's fourth quarter, according to advance estimatesreleased by the Bureau of Economic Analysis this morning. Economic analysts are chalking up the losses to reduced government spending—especially on defense, which saw a 22.2 percent decrease in government consumption expenditures. Conservatives are predictably upset at the lackluster report, blaming President Obama's economic policies for the lack of growth. How could they pass up this opportunity, seeing how it's the first time the country's economy shrunk since Q1 in 2009? But liberals are saying that deficit-hawk austerity is to blame for GDP decline. Will evidence about downsized federal budgets shrinking GDP change how lawmakers approach the budget fight?

This all makes the spectre of sequestration—the fiscal cliff holdover cuts scheduled to take effect in March unless lawmakers reach a deal to avert them—loom larger in Washington. The Chairman of the Council of Economic Advisers Alan Krueger even argued today on the White House blog that these federal defense spending cuts were "likely due to uncertainty stemming from the sequester." If a 22 percent cut in military spending (a product of American wars winding down in the Middle East) can hurt GDP this much, god forbid what $1.2 trillion in across-the-board cuts could do to the economy. The Bipartisan Policy Center's Steve Bell writes

The “fiscal cliff” now gives way to “sequester anxiety.” These across-the-board cuts in Fiscal Year (FY) 2013 spending loom as the next fiscal hurdle for policymakers ... For an economy that already suffers from chronic unemployment and very slow expansion, the sequester could push the nation into sub-2 percent GDP growth for 2013 and perhaps 2014.

Read more at The Atlantic Wire.

FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

    Download
  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

    Download
  • Federal IT Applications: Assessing Government's Core Drivers

    In order to better understand the current state of external and internal-facing agency workplace applications, Government Business Council (GBC) and Riverbed undertook an in-depth research study of federal employees. Overall, survey findings indicate that federal IT applications still face a gamut of challenges with regard to quality, reliability, and performance management.

    Download
  • PIV- I And Multifactor Authentication: The Best Defense for Federal Government Contractors

    This white paper explores NIST SP 800-171 and why compliance is critical to federal government contractors, especially those that work with the Department of Defense, as well as how leveraging PIV-I credentialing with multifactor authentication can be used as a defense against cyberattacks

    Download
  • Toward A More Innovative Government

    This research study aims to understand how state and local leaders regard their agency’s innovation efforts and what they are doing to overcome the challenges they face in successfully implementing these efforts.

    Download
  • From Volume to Value: UK’s NHS Digital Provides U.S. Healthcare Agencies A Roadmap For Value-Based Payment Models

    The U.S. healthcare industry is rapidly moving away from traditional fee-for-service models and towards value-based purchasing that reimburses physicians for quality of care in place of frequency of care.

    Download
  • GBC Flash Poll: Is Your Agency Safe?

    Federal leaders weigh in on the state of information security

    Download

When you download a report, your information may be shared with the underwriters of that document.