CASPER, Wyo. — Few Wyomingites may realize that striking cuts to government, combined with tax increases, could sweep the economy back into recession next year — unless Congress and the White House act soon.
Wyoming’s all-Republican congressional delegation blames the president and congressional Democrats for the predicament.
President Barack Obama said Congress needs to be realistic about what can be accomplished, and act fast.
Wyomingites who receive services from the government — practically everyone — could be affected by the possible cuts.
Also affected could be Wyoming businesses that contract with the U.S. Department of Defense, said Sen. Mike Enzi, R-Wyo., who recently visited the Star-Tribune and discussed the matter.
The cuts are called a “sequester.” Once it triggers, $1 trillion must be cut over the next decade, according to the Wall Street Journal.
If Congress and Obama don’t design their own a debt reduction program, the first part of the cuts trigger Jan. 2.
Obama recently told the Virginian Pilot that Democrats must understand that any debt deal will require spending cuts. He said Republicans must accept the need for additional tax revenue.
If the national debt were divided among each man, woman and child, it would be about $49,000, Enzi said.
In fiscally troubled Europe, each Italian owes $40,000 and each Greek owes $39,000, he said.
“I’m really worried,” Enzi said.
The sequester would likely be across the board, with the exception of Social Security, Medicaid, food stamps, veterans' health care and federal employee pensions.
What’s left to be cut? Exact details are unknown.
Government employees could be furloughed, which could result in fewer air traffic controllers, Transportation and Security Administration agents and food inspections.
There could be less money for education in low-income neighborhoods. About 12,000 HIV-positive patients could lose access to antiviral drugs.
"House and Senate Republicans pushed successfully for a law requiring the president to provide specific details about how he will implement the sequester,” Rep. Cynthia Lummis, R-Wyo., said in an email. “We passed the law before the August recess, the Senate followed suit and the president signed it."
Obama's report is due this month.
The sequester is not supposed to be permanent. The cuts are to propel both parties in Congress to take action on the debt, Lummis said.
House Republicans tried to replace the sequester's across-the-board cuts with targeted ones, but the Democratic-controlled Senate didn't follow suit, she said.
“We in the House even offered to cancel our August recess to work on the sequester if the Senate would pass their own package of cuts. They did not.”
Of all the anticipated cuts, the anticipated $55 billion slice to the Pentagon next year has received the most attention.
“The primary concern is defense cuts that will undermine our national security,” Sen. John Barrasso, R-Wyo., said in an email. “As Secretary [of Defense Leon] Panetta said, these cuts will hollow out our military.”
Obama also said he is concerned.
"There is still time and my expectation is sometimes folks on Capitol Hill don't always do things in a timely fashion, unlike our military, but they do do them eventually," he told The Associated Press.
Former President George W. Bush's tax cuts are about to expire. Also about to end is Obama’s payroll tax. The beginning of next year also unrolls the first expenses associated with the Patient Protection and Affordable Care Act, the federal health care reform law, wrote Pete du Pont, a Republican columnist for the Wall Street Journal.
The sequester, combined with the new taxes, may push the country off a fiscal cliff, du Pont said.
That’s an opinion Barrasso concurs with because taxes will hurt job creators, he said.
Enzi has ideas for how to fix the debt, including the “Penny Plan” and the biannual budgeting bill.
The Penny Plan would cut a penny from each dollar spent, balancing the budget in five years, he said.
The Biennial Appropriations Act would require Washington to budget in a way similar to Wyoming: over a two-year period instead of annually. The benefit would be time. Some agencies would be budgeted during even years and some during odd years, an advantage over trying to budget all agencies each year, the senator said.