A report in Monday’s Washington Post declares, “Many 2011 budget cuts had little real-world effect.” The contention is that a 2011 deal to cut $37.8 billion from the federal budget was stymied by departmental “gimmicks”—for example, counting programs which were already scheduled for termination as “cuts.”
“Today, an examination of 12 of the largest cuts shows that, thanks in part to these gimmicks, federal agencies absorbed $23 billion in reductions without losing a single employee,” reports the Post’s David A. Fahrenthold.
True as this may be, it should not lead anyone to believe that America dodged austerity. As The Economist’s Ryan Avent points out, federal expenditures relative to GDP have steadily declined since 2009, and 2011 was no exception. Avent also notes that the federal government shed 31,000 public sector jobs that year.
What he leaves out is that the austerity was even more severe on the state level, as it always has been. According to the Center for Budget and Policy Priorities, the fifty states had a combined budget deficit on $130 billion in 2011. As a result, state and local governments continued to locate cuts wherever they could—in fact, 2011 was a record year for government layoffs. The public sector shed 183,064 in that year alone, amounting to nearly a third of that year’s total layoffs.
The Washington Post claims that spending “gimmicks” affected $17.4 billion in planned cuts, leaving a mere $21.4 billion in austerity unaffected. That $21.4 was only from one budget deal—it does not include the continual fiscal deprivation hitting state capitols around the country. Nonetheless, and despite the mounting evidence that contractionary policy has hobbled the recovery, expect the Post’s exclusive to be held up as evidence that 2011 was a year of insufficiently painful cuts.