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Waters' Opening Statement in Markup Focuses on the Immediate Threat Posed by Sequestration

Congresswoman Maxine Waters, Ranking Member of the House Financial Services Committee, led committee Democrats today in calling for an open debate on the effects of sequestration, requesting that all Committee members put aside theoretical discussions of “Budget Views and Estimates.”  The complete text of her opening statement follows.

Thank you, Mr. Chairman.  The Committee is supposed to meet today to discuss its views on the federal government’s budget for fiscal year 2014.  However, given the lack of a budget, I am concerned that this exercise is premature and will leave unaddressed the most pressing budget challenge that face this Congress and the nation: the looming threat of sequestration that will impact our country in just three days. 
Sequestration will have devastating impacts on not just the programs within our jurisdiction, but on the economy as a whole, potentially leading to hundreds of thousands of hard-working Americans losing their jobs.  The sequester is a blunt instrument, mandating $85 billion in cuts across the government at a time when our recovering economy can least afford another major shock, particularly one that is indiscriminate and self-inflicted. 

Unless we act, the results will be dire, and felt throughout the entire economy.  We’ve already seen evidence of the effects of large, rapid budget cuts – specifically, the implementation of $1.5 trillion in discretionary cuts required under the Budget Control Act of 2011. These cuts were a leading cause of slow economic growth in the fourth quarter of last year. CBO now estimates that imposing the sequester will further damage the recovery, reducing growth for the remainder of 2013 by nearly a third, from a projected 2.0 % to 1.4%. 

The effect on jobs will be just as dramatic. CBO estimates that 750,000 jobs are at stake in 2013, the Bipartisan Policy Center projects the loss of at least a million jobs over the next two years, and a recent George Mason University study put the number at 2.14 million jobs – over 950,000 of which would be in small businesses.  The human effects of furloughs and layoffs both in government and the private sector will be sharply felt in communities across the country. 

OMB now estimates that the sequester will result in effective reductions for non-defense programs of 9% this year. As agencies have started to ready their plans for these cuts, we are more clearly seeing the potential extent of the unnecessary damage, from 70,000 kids losing access to Head Start, to furloughs at the FAA that will affect air travel.  Programs within our Committee’s jurisdiction will also be hard hit:

  • 125,000 families could lose much needed housing assistance through the Section 8 Housing Choice Voucher program, potentially putting them at risk for homelessness.

  • The SEC will be unable to hire the staff needed to carry out its broad new responsibilities to oversee derivatives, private fund advisers, clearing agencies, and credit rating agencies, and as a result serious problems in these areas will go unaddressed.

  • The Treasury Department will be forced to cut funding for underserved communities through the Community Development Financial Institutions Fund, reduce critical anti-money laundering activities, and reduce support for state and municipal bond programs that are helping to rebuild our infrastructure, schools and affordable housing.  

Democrats have proposed alternatives to these damaging cuts that balance targeted spending reductions and additional revenues.  Mr. Chairman, we believe it is critically important that we discuss these issues so that our constituents will know just what is coming if we fail to act in a balanced way to avert the sequester.  If that does not happen, any “Views and Estimates” that we consider today quickly will be rendered irrelevant by the tidal wave of ill-advised cuts, job losses and stunted economic growth that lurks right around the corner.  



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