Quite a bit of hoopla surrounds today’s deadline for automatic budget cuts, which will have an impact nationally and even locally. That fact is not in question with the projected $85 billion in proposed federal spending cuts through Sept. 30.
What is in question is how much of an impact will it have and whether it will affect the fledgling economic recovery we’re seeing in North Texas and beyond.
While White House officials are sending news releases indicating government furloughs and less access to government-funded programs and services, some economists are indicating the improving economy will not be shaken from its foundation.
Bernard Baumohl, chief global economist at the Economic Outlook Group, says in an Associated Press report that businesses and consumers are beginning to look away from the histrionics and battles going on in Washington, D.C.
“They’re beginning to realize that organic growth in the private economy is beginning to pick up speed,” he says.
And those are the words we’d offer as a small salve to repeated wounds dealt to such entities as the Denton school district, which has had to deal with not only the projected $9.19 million in funding subject to sequestration but also from state funding cuts in recent years.
The belt tightening also has occurred with both universities — Texas Woman’s University and the University of North Texas — and, to some extent, our city and county governments.
U.S. Rep. Michael Burgess, R-Lewisville, says that the across-the-board cuts appear to be the only way to trim the federal budget, though it is not a preferred method.
Unfortunately, he adds, the proposed cuts are just the beginning.
“Right now, we’re talking the easiest lifting when it comes to cutting the federal budget,” he says. “The harder stuff comes later.”
The bottom line, he adds, is the federal government is spending more than it takes in.
It is a lesson those in the business community understand only too well.If a private-sector company spends more than it takes in for too long, it goes under. It’s that simple.
And while we understand that the trimming is never easy for anyone, including the federal government, we also understand that trimming is far better than the result — a financial meltdown.