Fox Still Dismissing Spending Cuts As Economic Fallout Begins


Fox News hosts have been dismissing the effects of the across-the-board government spending cuts known as sequestration, claiming that "nothing is happening" following the cuts taking effect. But the cuts are already having negative economic consequences that will continue unless the cuts are replaced.

"Nothing Is Happening": Fox Hosts Dismiss Sequestration Cuts

Hannity: Obama's "Doomsday Sequester Narrative Is Unraveling Faster Than We Can Keep Up." On the March 5 edition of Hannity, host Sean Hannity said, "Meanwhile, tonight, President Panic's doomsday sequester narrative is unraveling faster than we can keep up. Now, Barack Nostradamus Obama predicted a Mayan apocalypse if sequester went into effect. And now his unfulfilled prophecies are mounting and forcing his administration to do what they do best -- lie to you, the American people." [Fox News, Hannity, 3/5/13]

Cavuto: "Three Days In" To Sequestration Cuts And "Nothing Is Happening." Host Neil Cavuto opened the March 6 edition of Your World with Neil Cavuto by saying, "three business days in -- sequestration frustration is now a contagion. But not because bad things are happening. No, no, no. Because nothing is happening." [Fox News, Your World with Neil Cavuto, 3/6/13]

Fox's Dobbs: Sequestration Cuts Are "Far More Harmless Than Many Suggest." On the March 5 edition of Fox Business' Lou Dobbs Tonight, host Lou Dobbs said that the impact of the cuts would be "far more harmless than many suggest." [Fox Business, Lou Dobbs Tonight, 3/5/13]

Obama Repeatedly Said Cuts Would Have Negative Effects That  Would Not "Be Felt Overnight" ...

Obama: Although It "Won't Be Felt Overnight," Automatic Spending Cuts "Will Weaken America's Economic Recovery" And "Our Military Readiness." In a speech in Newport News, Virginia, on February 26, Obama said:

Instead of cutting out the government spending we don't need -- wasteful programs that don't work, special interest tax loopholes and tax breaks -- what the sequester does is it uses a meat cleaver approach to gut critical investments in things like education and national security and lifesaving medical research. 

And the impact of this policy won't be felt overnight, but it will be real.  The sequester will weaken America's economic recovery.  It will weaken our military readiness.  And it will weaken the basic services that the American people depend on every single day. 

Already, the uncertainty around these cuts is having an effect.  Companies are starting to prepare for layoff notices.  Families are preparing to cut back on expenses.  And the longer these cuts are in place, the greater the damage. [, 2/26/13]

Obama: "Not Everyone Will Feel The Pain Of These Cuts Right Away" But "The Pain ... Will Be Real." In a statement preceding a press conference on March 1, Obama said the cuts would "hurt our economy" and "cost us jobs." He later said:

Now, what's important to understand is that not everyone will feel the pain of these cuts right away.  The pain, though, will be real.  Beginning this week, many middle-class families will have their lives disrupted in significant ways.  Businesses that work with the military, like the Virginia shipbuilder that I visited on Tuesday, may have to lay folks off.  Communities near military bases will take a serious blow.  Hundreds of thousands of Americans who serve their country -- Border Patrol agents, FBI agents, civilians who work at the Pentagon -- all will suffer significant pay cuts and furloughs. 

All of this will cause a ripple effect throughout our economy.  Layoffs and pay cuts means that people have less money in their pockets, and that means that they have less money to spend at local businesses.  That means lower profits.  That means fewer hires.  The longer these cuts remain in place, the greater the damage to our economy -- a slow grind that will intensify with each passing day. 

So economists are estimating that as a consequence of this sequester, that we could see growth cut by over one-half of 1 percent.  It will cost about 750,000 jobs at a time when we should be growing jobs more quickly. [, 3/1/13]

... And The Cuts Are Already Having And Will Continue To Have Serious Economic Effects

American Prospect: Spending Cuts Could "Cost Roughly 700,000 Jobs" And Slow GDP Growth By 0.5 Or 0.6 Percent. In an article titled, "Obama Didn't Cry Wolf on the Sequester," The American Prospect noted that "[s]equester furloughs have already begun for some federal workers" and noted:

Private forecasting firm Macroeconomic Advisers estimates "sequestration would cost roughly 700,000 jobs (including reductions in armed forces)," while Moody's Analytics predicts a hit to real gross domestic product of 0.5 percent, just a hair below Fed Chairman Ben Bernanke's prediction 0.6 percent fiscal drag. [The American Prospect, 3/6/13]

Republican Governor Bob McDonnell To Obama: Spending Cuts Pose "Potential Devastation" To Virginia Residents. In a February 18 letter, Virginia's Republican governor Bob McDonnell asked Obama to take action to repeal the spending cuts, writing, "I write today to respectfully request your immediate attention to address the potential devastation that looming cuts to defense due to sequestration will have on national security and on the economic well-being of the citizens of the Commonwealth. ... The automatic sequestration reductions mandated by the Budget Control Act of 2011 are already having a significant adverse effect on the Commonwealth." [, 2/18/13]

Wash. Post: Many Defense Department Employees Face "A 20 Percent Pay Cut For Nearly Half The Year." A Washington Post article about the effects of the sequester on the Defense Department stated:

Navy and Air Force employees, along with nearly all other Defense Department civilians, are facing unpaid furloughs of 22 days from late April through September, which would be spread out as one day a week on average. That would amount to a 20 percent pay cut for nearly half the year. [The Washington Post, 3/5/13]

Wash. Post: Furlough-Caused Financial Problems Could Affect Security Clearances. The Post article also explained that federal employees holding security clearances could run into financial troubles because of the cuts, which could affect those employees' clearances:

Federal employees holding security clearances who run into financial trouble due to sequestration-caused furloughs should bring that issue to their agency's attention to help protect their cleared status, according to two military services.

In guidance that could apply equally to employees of other agencies, the Navy has said its employees should notify their supervisors or their security officers in writing if the forced unpaid leave time causes financial troubles that would act as a security red flag.

Indebtedness is one of the potential indicators of reliability, trustworthiness and judgment that go into a decision on granting or continuing security clearances, which are needed for many federal jobs. [The Washington Post3/5/13]

Wash. Post: Education Cuts To Impact "Poor And Disabled Children" And Schools On Native American Reservations And Military Bases. A March 5 Washington Post article explained that the cuts would have an adverse effect on "schools on Indian reservations and military bases, which receive a larger share of their funds from Washington as compensation for the fact that they can't raise funds from local property taxes [as most schools do]." The article noted that a school district on a Native American reservation in Arizona is considering "closing three of its seven schools as a result of the federal sequester." The article further stated that while public education is mostly funded by state and local governments, "[f]ederal dollars," which will be cut, "are largely concentrated on poor children and those with disabilities." [The Washington Post, 3/5/13]

NY Times Blog: EPA, FEMA, National Park Systems Will Be Adversely Affected By Cuts. A post on the New York Times blog IHT Rendezvous noted that staff at the Environmental Protection Agency will face furloughs and some "will temporarily lose their jobs." The EPA has also said, the post continued, that "it would have to reduce the number of environmental inspections, enforcement of rules at Superfund sites (sites contaminated by hazardous substances), groundwater cleanup actions and much more." The post noted that federal disaster relief and the National Park system will also both see cuts. [The New York Times, IHT Rendezvous, 3/4/13]

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