Approximate Geographic Impact of the Sequester

From Wells Fargo (using Pew Center data), a graphic depicting exposure to Federal spending, and hence sensitivity to the sequester.



geoseq.gif

Source: Vitner, Brown, “Sequestration: Which States Are Most Vulnerable?,” Special Commentary, Wells Fargo Securities Economics Group (February 13, 2013).

The Administration released a geographic breakdown on Monday, which WaPo presents here. Additional coverage from WaPo.


Here is a reminder of the macroeconomic impact of the sequester, according to Macroeconomic Advisers.


maseqpix.gif

Source: Macroeconomic Advisers (2/20/2013).

More discussion of the macro impact of the sequester, here.


Update, 1:20PM Pacific: The Pew Center has created an interactive graphic that depicts the geographical impact, by categories (h/t Wonkblog).

StumbleUponLinkedInReddit

24 thoughts on “Approximate Geographic Impact of the Sequester

  1. 2slugbaits

    The information that the Administration provided to the WaPo is a bit misleading. The Pentagon provided Congress with a similar state-by-state breakdown of job losses. Now there’s nothing wrong with the numbers themselves, but the job losses are entirely attributed to the zip code of the agency taking the cuts. That’s a problem with DoD jobs because (by design) a lot of defense jobs are located very near state borders. The Pentagon always saw this as a way to get four Senators for the price of two. So for some states the hit won’t be as bad as the WaPo numbers suggest; but for other states the hits will be quite a bit bigger.
    The Administration is also making a tactical mistake in hyping the 1 March date. In fact, very few furloughs or layoffs will take effect on 1 March. Secretary Panetta just issued a memo stating that Pentagon furloughs will not commence until the pay period beginning 27 April. And since that date is driven by OPM “administrative furlough” rules
    http://www.opm.gov/policy-data-oversight/pay-leave/furlough-guidance/guidance-for-administrative-furloughs.pdf
    that late April date will be generally true across the federal government. The danger is that the 1 March date will come and go and people won’t notice much change. That might embolden Tea Party crazies to think the Administration was “crying wolf.” The real hits will not start to bite until late April/early May.
    Regarding the Macroeconomic Advisor’s forecast, my understanding is that MA is mainly looking at just the aggregate demand impacts. The furloughs will also create a supply side shock that I don’t think MA accounted for. For example, air, sea and barge traffic will be impacted. USDA inspectors will approve less beef, pork and poultry, so consumers should expect shortages and higher food prices. Shipping insurance costs will increase because the US Navy will be deploying fewer ships. The CVN Theodore Roosevelt is already being held back from deployment to the Persian Gulf because the Navy does not have enough money to refuel their ships…in the case of the CVN Theodore Roosevelt the fuel happens to be nuclear (hence the “N” in “CVN”). Want to go to Europe this summer and need a passport? Good luck with that. And even if you have a passport, enjoy the long wait through customs. Does your supply chain depend upon just-in-time inventory and overnight shipments? Sorry, the FAA won’t be working when UPS and FedEx planes land at night. Forget about fresh fruit and flowers from Central America. As Republicans love to point out, the federal government has inserted itself into all aspects of the economy. So when there is a 20% cut in manhours they should expect a strong supply side shock.

  2. ppcm

    Sequester:
    1. take, seize, confiscate, appropriate, impound, commandeer, take possession of, expropriate, arrogate, sequestrate.
    2. isolate, cut off, seclude, retire, withdraw, set apart, shut away
    One may find interest in the above etymology of sequester from Latin to French to English.
    One may find equal interest in more blatant economic or financial sequesters that are not raising an equal amount of pixels or decibels.
    Isolate, seclude, withdraw: the Central Banks have isolated or withdrawn at least
    18 Trillion of USD assets from the markets. Such practice is putting under sequester the price formation of assets through supply and demand.
    The German central Bank is not consolidating the total assets and liabilities as should be included within its Balance sheet. This is a sequester of information assets and liabilities and reliable risks assessment..
    The property markets are not recording the volume of transactions, at least in Europe the pricing mechanism is under sequester. In the same property markets all assets for sale are not in the markets it is to shut away free markets choices.
    The European constitution has been violated and no one has been sequestrated for doing so.
    The list is much longer and one may tempted to conclude with the election in Italy, when unable to sequestrate few deserving politicians and civil servants, the politic itself, has been sequestrated.

  3. Ricardo

    Rand Paul returned $600,000 of his congressional budget to the Treasury because he was frugal in spending the money of his constituents. If every member of congress was as faithful to their constituents as Paul Congress could return $261 million. If every agency in the government was as faithful to honesty and careful in treating other people’s money, there would be no question of a sequester.
    As has been stated here before almost as much more was spend on hurricane Sandy relief as is being cut in the sequester, but there is a difference. Hurricane Sandy spending was real spending. The sequester is not real cuts. It is cuts in the rate of increase. After the sequester you will still owe more to pay the governments bills than you owed before.
    This political ploy of the President is really getting tiresome – closing the bathrooms in the national parks – give me a break. Like bathrooms are causing our debt crisis?

  4. Jeffrey J. Brown

    Ricardo:
    “This political ploy of the President is really getting tiresome – closing the bathrooms in the national parks – give me a break. Like bathrooms are causing our debt crisis?”
    I agree.

  5. 2slugbaits

    Ricardo An old man of your age really should be concerned about closing bathrooms at national parks. Better stock up on the Depends.
    And if you live in Erie County, New York you also better make dinner arrangements because there will be 36,000 fewer meals on wheels for seniors.
    Oh wait, even if you don’t depend on meals on wheels you could still have problems finding your favorite foods. For example, you should expect 2 billion fewer pounds of meat, 3 billion fewer pounds of chicken and 200 million fewer pounds of eggs. All because there will be 20% fewer USDA inspectors.
    http://money.cnn.com/2013/02/21/news/economy/federal-budget-cuts/index.html

  6. benamery21

    While I hardly expect Ricardo to be consistent, I’m confident bathroom closures would save significantly more money than Rand Paul’s office budget.

  7. Ricardo

    Slug,
    Not to worry. I doubt Obama will reduce his $1million vacations or even take a vacation with his family to lower the cost. I doubt any Democrat would ever consider strict budgets to reduce their spending. I doubt there will be any reduction in foreign aid or in the croney capitalist billion dollar bailouts. There is no need to worry the CIA and the GAO and the National Endowment for the Arts and all of the other agencies will still have plenty of money to fund prostitutes in Colombia (Dominican Republic anyone named Mendez) or champaign baths in Las Vegas or “Piss Christ” exhibits. I doubt the next “green” hair-brained idea will have no problem getting billions. I mean we are after all closing bathrooms (that’s okay we still can hide in the trees) and laying off USDA inspectors. You don’t have to worry because your government has its priorities straight, as you see them.
    I mean after all, as a Keynesian it doesn’t matter what we spend it on just as long as we spend it. What’s the difference between bathrooms and bonuses for Solyndra executives anyway?

  8. Ricardo

    Menzie,
    It would be helpful if you were to show the amount of spending in 2012 by state compared to the amount of spending in 2013, after the sequester, by state. (Do you dare!)

  9. Jeffrey J. Brown

    Matt Drudge is having a field day with the Obama/Woodward feud (side by side pics of Nixon and Obama), and the Obama/Woodward feud was a lead story this morning on Good Morning America.
    One would think that the administration insiders are beginning to realize that they have gone way overboard regarding: (1) Trying to distance themselves from the sequester idea; (2) Trying to discredit Bob Woodward and (3) Trying to scare the public about minor budget “cuts.”
    Regardless of one’s political affiliations, the fact remains that we cannot afford our current level of government spending, and the sequester “cuts” are a tiny fraction of what must come, sooner or later.

  10. Ricardo

    Menzie,
    Forget my request for spending information. Phil Gramm wrote about it in today’s WSJ.

    The president’s response to the sequester demonstrates how out of touch he is with the real world of working families. Even after the sequester, the federal government will spend $15 billion more than it did last year, and 30% more than it spent in 2007. Government spending on nondefense discretionary programs will be 19.2% higher and spending on defense will be 13.8% higher than it was in 2007.

  11. Joseph

    Actually, Phil Gramm most certainly does know the difference between nominal and real dollars, but he has such contempt for the intelligence of the readers of the WSJ that he thinks he can get away with misleading them. Given he’s been quoted in this thread by Ricardo, he might be right!

  12. JIm A

    um…That’s either the pay period ending on the 27th or the pay period beginning on the 28th.. Pay periods begin every other Sunday.

  13. tj

    2slugs never misses an opportunity to denegrate Conservatives. In that spirit, I offer you the following quote from Progressive Genius Maxine Waters:
    “If sequestration takes place, that’s going to be a great setback. We don’t need to be having something like sequestration that’s going to cause these job losses — over 170 million jobs that could be lost,” Waters said.
    The sad part is that most of the wackos on the far left actually swallow that tripe and are not even in the ballpark when it comes to comprehending Progressive policy.
    It’s even more disturbing that the United States of America cannot shave a few percentage points from the increase in discretionary spending this year and next year without creating an “economic catastrophe” (“catastrophe” according to liberals; Progressives and Democrats alike.)
    Think about this fact for a moment. How will our Congress and President ever reach a deal to reduce the growth rate of government spending, when liberals scream bloody murder if anyone suggests ANY cut to the growth rate in government spending.
    The average annual increase in discretionary spending from 2003 to 2012 is almost 6%. Nondiscretionary almost 5% and defense almost 7%.
    http://www.cbo.gov/publication/42214
    The left won’t agree to ANY cut to the growth rate of government spending.
    Liberals would rather let Republicans propose cuts to the growth rate of government spending, and then bash them for it. Why? So, the left can gain control of Congress in 2014 and “fundamentally transform America” in the last 2 years of Obama’s presidency.

  14. 2slugbaits

    JimA My bad. It’s actually the pay period beginning 21 April. Most agencies plan on making that Friday (the 27th) the furlough day because that delays things as long as possible.
    tj The cut actually represents about 10% of discretionary spending because most of government spending is immune (Social Security, Medicare, soldier pay, etc.). And it’s all compressed into 5 months. And it was that Tea Party darling former Rep. West (FL-R) that insisted Executive Dept officials have no discretion…it had to be a meat cleaver approach.
    In the current economic environment we shouldn’t be making any cuts at all. We should be increasing spending. The time to cut discretionary spending is when the economy is safely out of recession. We’re not there yet.
    The position of the Tea Party wing of the GOP is imcomprehensible. Their main complaint is with outyear entitlement spending on Social Security, Medicare and Medicaid and not discretionary spending. In fact, real discretionary spending has been going down since 2009. So in the Tea Party brain the problem is outyear entitlement spending so the apparent solution is to cut current year discretionary spending. Not too bright these Tea Party types.

  15. tj

    Not to bright of President “Odrama” to propose the sequester in the first place. It was his idea, so stop trying to shift the blame.
    I can’t beleive you’ve fallen for President “Odrama’s” Chicke Little “sky-is-falling” approach to every problem. According to President “Odrama” all we have to do is raise taxes on the wealthy and all of our fiscal problems will be solved.
    He had a bargain with Boehner until he doubled the tax revenues in the deal at the last minute. That was his plan all along, scuttle the deal. Bash, blame and create fear. All this from the guy who said his administration would end the use of fear tactics and be the most transparent administration ever.
    Why you and others can’t see through this charade is beyond me.

  16. Ricardo

    Menzie,
    Don’t play the Progressives political game of attacking the messenger while avoiding the message. If the government will not spend $15 billion more than it did last year, and 30% more than it spent in 2007, then off evidence. Come on, you are not running for office…!!

Comments are closed.