Sunday, February 03, 2013

Sequestration and State and Local Federal Grants

A post by Max R got me to thinking about the sequestration cuts coming.

One hears a lot of screaming by conservatives about the defense budget cuts, but not so much screaming by progressives about similar drastic cuts coming for social and special project spending. Why?

Apparently it has something to do with how the cuts will be felt.

Portland light rail is running out of money--federal money. From the article Max linked to:
Elissa Gertler, a deputy director at the Metro regional government, and the supervisor of the two corridor planning efforts, says there’s one big reason that interest in bus rapid transit may be overtaking light rail: "First and foremost, light rail is expensive. A big capital investment costs a lot of money, and partnership with the federal government in how to fund that has diminished over time, as we’ve expanded our system in this region.” [emphasis added]
Not only has federal funding diminished over time, but whatever is still there is almost sure to be cut. The sequestration cuts on non-defense spending will likely have a big impact on federal dollars now going to fund state and local projects. The left-leaning Center on Budget and Policy Priorities explains:
"If funding for these grants to state and local governments is cut by 22 percent, in line with the cut to overall non-defense discretionary funding, states and localities would lose nearly $28 billion in 2014 — on top of the cuts they will absorb as Congress shrinks funding for such grants, along with other discretionary programs, to comply with the BCA caps."
. . .
"In theory, policymakers could spare state and local funding and take all of the required cuts from purely federal areas of non-defense discretionary spending; in reality, there is no chance that would occur, as it would entail extremely deep cuts in funding for veterans health care, biomedical research to find cures and better treatments for various diseases, protecting the borders, the FBI, the Social Security Administration, and the like. Indeed, federal policymakers likely would cut state and local aid by more than 22 percent in order to protect funding for federal activities such as these."
In other words pet state and local projects like Portland light rail will feel the brunt of non-defense reductions. A thousand smaller cuts have not roused liberal sentiment like the more focused massive cut to defense spending has mobilized conservatives. At least not yet.


MAX Redline said...

I'm just waiting for the reality to start smacking some people around the head, TD. Of course, the whack-jobs that Sam hired into his Sustainability Bureau are still pushing for light rail down SW Barbur Boulevard to make things more "vibrant" and all, but they're going to find that there's no money for that - so we dodged that bullet.

I'm looking to see what happens when they find they can't fund the light rail portion of their I-5 bridge project (10 years of "planning and design", $200 million spent, and not one shovel-full of dirt moved).

T. D. said...

Max, you're on the cutting edge of figuring these things out. I tag along behind. Thanks!