On Monday, Tony O’Leary joined a handful colleagues in public housing at a meeting in Washington with Shaun Donovan, the secretary of housing and urban development. O’Leary runs the Akron Metropolitan Housing Authority. He and the others requested a measure of relief.
Their operations have been squeezed hard by the sequester, the $85 billion in spending cuts stemming from the failure of the White House and Congress to reach a larger compromise on reducing the federal budget deficit. The housing officials did not ask for more money. They get the political landscape. They want an easing of regulations, less paper shuffling so they can devote shrinking resources to serving clients.
By all accounts, Secretary Donovan sounded receptive. He sees the trouble brewing.
When President Obama first issued warnings about the fallout from the sequester, many Republicans guffawed. They ridiculed the notion that the federal government couldn’t weather cutting 2 percent or 3 percent from the budget. No question, the president and other Democrats exaggerated with talk of meat cleavers and eviscerating programs.
Yet Republicans missed the mark in a bigger way. Three percent makes sense in the abstract. Consider the actual dimensions of the sequester.
A majority of federal spending has been exempted, including Medicaid and Social Security. The cuts are split evenly between defense (minus military personnel) and the remainder of domestic spending, such things as education, research, nutrition assistance and air-traffic control.
Narrow the field for cutting, and those percentages climb. Defense must cope with an 8 percent reduction, and domestic spending between 5 percent and 6 percent. Factor, too, the reductions coming in the middle of the fiscal year, adding to their size and impact. Then, note that many accounts are restricted in their use, officials without the authority to move money among accounts.
Pretty soon, as the saying goes, you’re talking real money and, more important, real lives, paying the price of Washington blundering.
Remember, the sequester was supposed to be a poison pill, so damaging that Democrats and Republicans would come to their senses and strike a responsible deal. If not for Republican resistance to additional tax increases, even as spending cuts still outpaced new revenues, a better course likely would have been taken.
Recall, too, that Ben Bernanke, the Federal Reserve Board chairman, has warned that the sequester could slow economic growth by 1.5 percentage points this year, a weaker recovery hurting job creation, lower revenues actually adding to the deficit.
In all of this, there is no greater casualty of the sequester than public housing. Douglas Rice of the Center on Budget and Policy Priorities recently explained the harm. Among other things, he notes that by early next year, local agencies will have little choice but to reduce by roughly 140,000 the number of households using vouchers to afford housing.
These are poor and vulnerable households, half headed by seniors, or people with disabilities, the rest families with children, the average income around $12,500. The voucher program dates to the 1970s, a bipartisan success story, a public-private partnership, in effect. Why apply the budget knife here?
Rice makes more evident the misguided thinking. The sequester reductions follow earlier cuts in housing spending. They come as demand for such assistance has been increasing, many still struggling in the aftermath of the harsh recession. As the sequester risks more people without housing assistance, it takes aim at grants for shelters and other ways to ease homelessness, one program 34 percent below its level last year.
More, as Rice adds, children are casualties. He points to research showing that “housing instability and homelessness interfere with the healthy development of children in ways that have a lasting impact,” affecting their school performance and, ultimately, their earnings as adults.
At the Akron Metropolitan Housing Authority, Tony O’Leary has been calculating the challenge. He projects his operation will handle 650 fewer housing vouchers, soon staff members no longer taking applications, families without the option to obtain decent housing. Surely, staffing will be squeezed, likely resulting in delays handing cases and complaints. A capital fund with $2.5 million less will translate into fewer building repairs.
All of it promises a ripple effect, fewer purchases of materials and professional services, less money flowing to landlords, not to mention through the local economy, activity diminished for local businesses.
At the end of his analysis, Douglas Rice reminds that the Bowles-Simpson commission and other bipartisan panels that have looked at the country’s long-term fiscal problems have held to the principle that reducing the deficit “should not increase poverty or exacerbate hardship for vulnerable Americans.” Yet, as he stresses, the sequester applies one quarter of the domestic spending cuts to low-income families and individuals. Of which there is no more disturbing example than public housing.
Douglas is the Beacon Journal editorial page editor. He can be reached at 330-996-3514, or emailed at email@example.com.