We’re two days from the deadline that Congress and the President set for themselves to find a solution to dodge the indiscriminate, across-the-board cuts to federally funded programs, otherwise known as sequestration. Sequestration, if you remember, was the mechanism approved by Congress and the President in 2011 to spur greater focus by both to take steps address the nation’s deficits. It was believed, at the time, that the automatic cuts imposed by the sequester would be so unpalatable that our federal policymakers would rise to the occasion and find a solution to the budget crisis. That has not yet proved true.
The clock has ticked away without tangible progress ahead of the imminent Friday deadline. By then, if no agreement is in place, sequestration kicks in -- creating an ominous forecast for American innovation, and in turn, economic growth in the country. Federal Reserve Chairman Ben Bernanke, in testimony before the House Banking Committee on Tuesday, told lawmakers that the sequester’s blind cuts to take effect will hurt the economy and its nascent recovery.
The CBO estimates that deficit-reduction policies in current law will slow the pace of real GDP growth by about 1-1/2 percentage points this year, relative to what it would have been otherwise.
A significant portion of this effect is related to the automatic spending sequestration that is scheduled to begin on March 1, which, according to the CBO’s estimates, will contribute about 0.6 percentage point to the fiscal drag on economic growth this year. Given the still-moderate underlying pace of economic growth, this additional near-term burden on the recovery is significant.
After the country has worked so hard to escape the grips of the long and painful recession, it makes little sense to add this heavy drag to communities, businesses, and working families. It would send the recovery backwards.
The federal government has long played an integral role in funding a number of life-changing discoveries. These discoveries create jobs and economic growth. In ignoring the consequences and allowing sequestration to take effect means we will be flirting with an economic slowdown, and puts at risk American innovation and job growth in our already fragile economy.
Technology can provide myriad cutting-edge solutions to challenges facing the U.S. and the world. But it can’t solve this one. To stop the sequester, we need old-fashioned leadership from our elected officials.
You can learn more about sequestration on ITI’s blog:
- STEM Ed and Basic R&D Face Threat in Budget Cuts
- TI CEO to Focus on Federal Support for Science, Research