January 29, 2013
Tim Kauffman
[email protected]

AFGE Statement on GDP Decline

WASHINGTON – American Federation of Government Employees National President J. David Cox Sr. today issued the following statement in response to news that the U.S. economy contracted in the fourth quarter of 2012, as measured by the Gross Domestic Product (GDP):

The decline in GDP was not a statistical anomaly. It was a direct consequence of budget austerity – the economic policy that is the essence of the Budget Control Act and its impending sequestration.

Our economy would not have shrunk if not for the 6.6% decline in government spending, particularly the 22.2% decline in defense spending. The Center for Economic and Policy Research calculated that this decline in spending cut 1.33 percentage points from GDP growth.

Moving forward, we can expect an even steeper decline in economic growth if Congress fails to cancel sequestration. Cutting an additional $85 billion in government spending through sequestration will be ruinous not only to economic growth, but also to the lives of furloughed federal employees and people who depend upon them to provide much-needed government services.

Sequestration could result in two million federal employees being furloughed – in effect, laid off without pay – for up to 30 days in the remainder of 2013. These workers will have less money to spend, causing the GDP to decline further or grow much more slowly than it should. Why would Congress refuse to act to stop this madness? What good can come of sequestration? The answer is absolutely nothing good – only hardship and decline.

Congress needs to show some courage and brains and cancel sequestration. The growing acquiescence to sequestration needs to end. Sequestration punishes the public by endangering our food supply, our borders, a ready military, and basic benefits like Social Security and nutrition assistance for women and children. And it imposes unconscionable hardship on federal employees who have already sacrificed more toward deficit reduction than any other group of Americans.

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