By all accounts it looks like $85-billion dollars in automatic federal spending cuts will take effect Friday.
The sequestration cuts are trigger put in place if Congress fails to reach agreement. The current impasse means federal agencies and programs across the board are bracing for cuts, furloughs, and even some closures of some offices and services. South Dakota relies a great deal on federal funding–everything from the National Guard to the National Parks.
SDPB’s Charles Michael Ray found that the state will see its share of impact. He has today’s Dakota Digest.
When asked about the possible impact of the funding cuts on the B1-bomber stationed at Ellsworth Air Force Base U.S. Senator John Thune uttered what many people in Rapid City think of as a four letter word – BRAC.
“My guess is what we’re going to see probably in the president’s budget this year is a request for another BRAC round perhaps even more than one BRAC round,” says Thune.
BRAC is the Base Realignment and Closure Commission. In 2005 during the last BRAC Ellsworth narrowly escaped the chopping block. There is some concern that Ellsworth could again face closure especially if the B1 is mothballed in future cuts.
“My biggest heartburn when this thing passed in 2011, I supported it reluctantly after having conversations with our leaders expressing my strong concerns and reservations, was that 50% of this is in defense,” says Thune.
The military is targeted for the biggest cuts out of all federal agencies—But the DOD isn’t the only one tightening its belt–the DOE is too. That’s the Department of Energy. The DOE is a major funder for the Sanford Underground Lab at Homestake. DOE officials say furloughs and cutbacks on key programs are possible. The budding hi tech industry in South Dakota is tied to both DOD and DOE funding–but the cuts may affect more than technology jobs. The state’s biggest industry, Agriculture could also see federal programs cut. USDA Deputy Secretary Kathleen Merrigan outlined some of the cuts on SDPB’s Dakota Midday. They range from food inspection to rural housing.
“We have a lot of programs that are going to be impacted, other than the stamp program, formerly known as food stamps everything else gets the budget act so we will be felling pain no doubt,” says Merrigan.
Ag is the biggest industry in the state and tourism is the second. A new report shows that in 2011 tourists visiting National Parks in South Dakota, spent $165-million dollars in nearby towns and cities. National Parks will see cuts under the sequester. Michael Reynolds Midwest Regional Director with the Parks Service says the sequestration will hit even the biggest National Parks in South Dakota.
“I can tell you for example at Mount Rushmore one of the main visitor centers would be closed for most of the year turning away about one-point-four million visitors away from the program and resulting in about a million dollars in lost revenue for that park,” says Reynolds.
Reynolds says the cuts will also result in closing a campground and Wind Cave, and several visitor and education programs in Parks around the state. He notes one other area that could see cuts is fire suppression.
“I’m very concerned about fire crews if we don’t have enough crew to handle fires could be left to burn, in certain cases. we hope not,” says Reynolds.
It’s not only the National Parks worried about wildfires this year – the National Guard is too. Major Anthony Diess with the Guard says the sequestration could impact the emergency response ability of the guard along with the maintenance and training routine around military aircraft. Guard helicopters often help battle Black Hills wildfires.
“Obviously we’re in a drought this year so we’re very concerned about wild land fires this year and our ability to make sure that we’re able to provide support to the state for operations like that,” says Diess.
With all this, there are those who say hold on the sky isn’t falling. Republicans like U.S. Senator John Thune accuse President Obama and others of using scare tactics around this issue.
“Rather than focusing his efforts on working with the republicans and all members of congress to replace the sequester with alternative targeted spending cuts the president was out there campaigning and trying to scare people with these worst case scenarios,” says Thune.
Meanwhile some economists like Paul Krugman point out that political fear mongering is making the national debt problem look bigger than it really is. The Fed Chairman Ben Bernanke says the sequestration could reduce economic growth by half a percentage point. Here he is speaking before a congressional committee earlier this week.
“It was done to be sort of like Dr. Strangelove, you know the bomb that goes off. So if obviously if you can find a way, in a bipartisan way to make it more effective and better prioritize that would be a good thing,” says Bernanke.
But Bi-partisan agreement is looking less likely. Many Democrats argue that trickle down economics has failed and that taxes on the wealthiest Americans, alongside support for vital government programs, are needed to sustain a robust economy. Meanwhile some conservatives grumble that the cuts don’t go far enough--even with the sequestration the federal government is still projected to increase spending this year. South Dakota is a small state that relies heavily on federal funding–all of this happens as the state budget process winds up Pierre—lawmakers are awaiting final budget projection numbers-and waiting to see what action congress takes.