ARTSblog

Gladstone Payton

As you have no doubt been following in the headlines, specific parts of the federal budget, including that of the National Endowment for the Arts (NEA), have been impacted by a budgetary control called “sequestration” beginning last Friday.

This sequester, totaling $85 billion, will reduce funding to almost all areas of domestic social programs by about 5 percent, which would mean about $7.3 million at the NEA.

This cut has been expected ever since the congressional “supercommittee” of 2011 failed to find agreement on how to achieve $1.5 trillion in deficit reduction over 10 years, either through spending cuts, raising revenue, or by a combination of both.

Since the possibility of the sequester was triggered, the White House’s Office of Management & Budget has alerted impacted federal agencies to prepare for it by withholding grant competitions, utilizing employee furloughs, reduced service, and other budget cutting actions.

Because the sequester is an “across-the-board” cut to federal agencies, it reaches indiscriminately into every identified program and activity.

The NEA, the U.S. Department of Education (which administers the federal Arts in Education program) and many other cultural agencies such as the Smithsonian, Institute of Museum and Library Services (IMLS), Corporation for Public Broadcasting (CPB), and others were forced to order these cuts by 11:59 p.m. ET on March 1.  Read the rest of this entry »

Gladstone Payton

Anxiety is already building on what promises to be a historic (for mostly all the wrong reasons) lame duck session of Congress after this year’s 2012 national elections in November. This session could possibly have a dramatic affect on the nonprofit arts sector.

Because all the seats in the U.S. House, and one-third of the Senate will be on the ballot November 6, there is very little motivation from either party to find a compromise in advance of election day. With control of the White House hanging in the balance, the political stability that follows an election appears to be the safest time for these issues of substance to be addressed, albeit in a very compressed timeframe.

What is the big deal?

It has many names: “Taxmageddon”; “Legislative Apocalypse” and others; you get the idea. The country is on schedule to see large tax cuts first put in place by President Bush, and then extended by President Obama, expire and huge cuts in government spending basically happen at the end of this year. This means that a tremendous shortfall for the national economy at large. Currently, the Congressional Budget Office estimates are that over $600 billion will be taken out of the still precarious economic recovery by the end of 2013.

How did we get here?

Last summer, President Obama agreed to House Republican demands to cut the burgeoning national deficit in order to increase the national debt limit ceiling to avoid default on our debt obligations. The Budget Control Act of 2011 (BCA) put into place a bipartisan “supercommittee.” Charged with finding how to cut $1.2 trillion promised in the BCA, they failed (miserably) to reach agreement which will trigger deep automatic cuts of 8.4 percent (sequestration) to most social and defense programs as agreed to in the BCA starting 2013.

Adding to the anxiety is the status of the so-called “Bush Tax Cuts” and the payroll tax cut which are set to expire at the end of this year. By letting the tax cuts lapse, the marginal rates for just about every American are scheduled to increase and employees will see less in their paychecks. Combined with the previously mentioned spending cuts, you get a dramatic shortfall. This will spur a lot of talk about reforming the tax code and cutting additional spending, and it could affect the arts sector in a number of ways. Read the rest of this entry »