July 1, 2013; On the Economy


Former economic advisor to Vice President Joe Biden and now Senior Fellow at the Center for Budget and Policy Priorities Jared Bernstein has his own blog where he raises interesting questions about economic policy. In this post, he brings up a question that has bothered us. He questions whether an article in the Washington Post, which contends, in his words, that “sequestration hasn’t been nearly as bad as some people expected” is correct. We’ve raised a similar question in various NPQ Newswires—if sequestration was going to have a significant impact on nonprofits, why haven’t nonprofits on the hustings been railing against this blunt-axe’s social toll?

He criticizes the Washington Post’s focus on “dire predictions” that did or didn’t come to pass. That’s the problem with dire predictions; if you suggest that something will be disastrous, but it doesn’t turn out quite that bad, it makes the still-negative-but-less-than-dire consequences that did happen look like aberrations that merit less attention. Nonprofits bemoaned the sequester, but the impacts of serial sequestration cuts on nonprofit service programs may have been less concentrated and more dispersed than people were led to believe.

If the sequester isn’t drowned in hyperbole, the actual negative impacts can be discerned. On an organization-by-organization or program-by-program basis, the sequester’s ill effects still show up in “the smaller picture…[of] micro-impacts on the families that lose a Head Start slot or a meal for a shut-in elderly person.” National leadership organizations should be calculating the running cumulative totals of these micro-impacts so that voters, the press, and nonprofits themselves can see how much the sequester has deprived nonprofits of vital resources.

In addition, like a municipality cutting a budget deal to pay for unfunded pension liabilities, many agencies figured out how to jimmy funding allocations during the first year of sequestration, taking unused resources and applying them to soften sequestration’s body blows. Now, with year II of the sequester getting ready to start, those first-year gimmicks won’t be available in years II, III, and IV of the sequester. Expect more reports from Nonprofit Quarterly next week on the impacts of the first year of sequestration on nonprofits and predictions for what year II will bring.—Rick Cohen