by Mike Andrew -
SGN Staff Writer
Relax. But only a little.
The country is not going to do a Thelma and Louise over the 'fiscal cliff' even if Congress fails to reach a compromise solution by January 1. Nevertheless, real people in the LGBT community will suffer real harm if the federal government does not resolve its budget crisis in a balanced and equitable way.
In spite of the overly dramatic name, originally coined by Federal Reserve chief Ben Bernanke, the 'fiscal cliff' is really nothing more than a temporary compromise between the Obama administration and the Republicans who gained control of the House in the 2010 election.
A DEAL WITH THE DEVIL
In the Budget Control Act of 2011, the administration traded its promise of future deficit negotiations for an immediate increase in the federal debt ceiling. As part of that deal, congressional Republicans held the country's creditworthiness and economic recovery hostage to force painful and immediate spending cuts, totaling more than $1 trillion over the 10-year period from 2012 through 2021.
In addition to these immediate cuts, the Budget Control Act also left Congress with the task of finding an additional $1.2 trillion to cut from the budget over the same 10-year period.
In the fall of 2011 the congressional 'super committee,' charged with devising a plan to reduce the deficit by this amount, failed to produce a proposal that could get majority agreement in Congress. The lame-duck session of Congress also failed to produce a deal.
This means that automatic cuts to the federal budget - known as sequestration - will be triggered and will go into effect beginning in January 2013 so as to achieve the $1.2 trillion in deficit reduction as mandated by the Budget Control Act.
TAX CUTS TO END
The so-called Bush tax cuts will also expire at the same time that sequestration goes into effect. If both occur simultaneously, then neither American consumers nor the federal government will be spending at current levels, potentially jeopardizing the country's fragile economic recovery.
Some of the most vulnerable Americans - including LGBT folks who depend on Social Security and Medicaid - will be shielded from the most drastic consequences, however. Major social programs like Social Security, Medicaid, pay for federal employees including military pay and pensions, and veterans' benefits are exempt from the spending cuts.
On the other hand, many federal programs that benefit LGBT Americans will be cut, according to a study prepared by the Center for American Progress, in partnership with the National Gay and Lesbian Task Force and 23 other national LGBT groups.
'Sequestration in particular would inflict significant harm by requiring wholesale cuts to programs that are critical to the health, wellness, and livelihood of LGBT people and their families,' CAP Vice President Jeff Krehely said. 'We cannot afford to let that happen.'
According to the groups' joint report, Caught in the Budget Battle: How the 'Fiscal Showdown' Impacts Gay and Transgender Americans, LGBT seniors and youth will be particularly harmed by sequestration.
Seniors who rely on Medicare will find that federal payments to physicians, hospitals, and other health care providers will be reduced in 2013, meaning they will have to pay more out of pocket for the same level of care.
LESS $ = MORE BULLIES?
For LGBT youth, sequestration would reduce funding for agencies within the Department of Education and Department of Justice responsible for investigating bullying claims against students based on their sexual orientation or gender identity.
With fewer resources, the report maintains, it would become more difficult for the Department of Housing and Urban Development to enforce relatively new federal regulations prohibiting discrimination against LGBT renters, tenants, and potential homeowners. Sequestration would greatly undermine the progress made over the past four years toward ending housing discrimination among the LGBT population.
Under sequestration, the Equal Employment Opportunity Commission, which enforces federal employment discrimination laws, would see an automatic cut to its budget in 2013 that will continue through 2021 if no budget resolution is reached after sequestration occurs. While these laws do not explicitly cover Gay, Lesbian, and Bi Americans, the Obama administration has interpreted laws against sex discrimination to cover Trans people.
HEALTH CARE TAKES HIT
In an area not covered by the Center for American Progress report, sequestration would also jeopardize health care services for LGBT Americans.
According to Dr. Dawn Harbatkin, executive director of Lyon-Martin Health Services in San Francisco, community health centers may lose $167 million in funding should Congress fail to negotiate a budget deal.
'[Sequestration] will affect the ability of community health centers to respond to the increased need for services expected from the implementation of the Affordable Care Act,' Harbatkin says, and thus jeopardize health care for the 30% of HIV-positive Americans who cannot afford health insurance.
DEFICIT NOT MAIN PROBLEM
The greatest tragedy may be that the whole 'fiscal cliff' crisis is based on the false assumption that deficit reduction is the most important thing the federal government can do to revive the national economy.
According to Christina Romer, professor of economics at U.C. Berkeley and a former chair of the Council of Economic Advisers in the Obama administration, cuts aimed at reducing the budget deficit might actually be harmful.
'A crude rule of thumb is that every $100 billion of deficit reduction will cost close to a million jobs in the near term. If that isn't a reason to move gradually, what is? But if you need another, just look at Europe,' she said, referring to the catastrophic economic collapse of several European countries after implementing austerity measures.
Her analysis was confirmed by the nonpartisan Congressional Budget Office in its report on the probable effects of going over the 'fiscal cliff.' The CBO predicted increased risk of a new recession during 2013 if the deficit is reduced suddenly through automatic spending cuts, even though lower deficits and debt would improve economic growth over the long term.
In other words, the budget cuts advocated by congressional Republicans are wrong in theory as well as harmful in practice.
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