While the figures released this morning exceeded pessimistic expectations, they still pegged second quarter growth at an insufficient 1.7%. Without the sequestration cuts, economists predict the economy would be growing at a much faster pace. These cuts have impacted middle-class families, small businesses, medical research, and high-tech defense jobs, among others.
“Economists agree that sequestration is damaging our economy,” said Stabenow. “We need to make smart spending cuts that target things that aren’t working like we did in the Senate Farm Bill, instead of continuing with these irresponsible across-the-board cuts. The sequester is hurting middle class families and businesses, and it’s time for Republicans to put rigid ideology aside and work with us to fix it.”
“If there was any doubt left that the sequester was a self-inflicted wound that our economy simply cannot afford, the report the Commerce Department issued today certainly should put an end to that,” said Schumer. “The report makes crystal clear that our economy should be taking off, creating millions of middle-class jobs and reversing the decline in middle-class incomes, but sequestration is standing in the way. Sequestration doesn’t mean cuts to abstract programs that don’t affect the American people. Sequestration means cuts to the middle-class, and cuts to jobs.”
“The sequester cuts have weighed heavily on the economy during the first half of this year,” said Moody’s Chief Economist Mark Zandi. “Real GDP growth came to a virtual standstill in the first half, as a sharp decline in defense and other government outlays cut deeply into the economy. Job growth has held up better, at least so far, but the loss of government and manufacturing jobs are directly tied to the ill-conceived spending cuts. These are generally middle income jobs, which is a key reason why middle America continues to struggle.”
“Looking across the first half of 2013, the GDP data shows clearly that sequestration has significantly reduced economic growth,” added Steven Rattner. “It has also cut the important investment programs that need more money, not less.”