But it's still a cut, maybe just not the way you would prefer. You could extend this logic to any spending cut and say that all it's doing is taxing something else, it depends how vague you want to define "tax". For example, lets say Obama didn't include roughly 300b in state aid in his first stimulus bill; the states then would have been "forced" to cover the difference since that money mainly went to medicaid which they had to pay, isn't this a tax on the states under the same idea?.
Simple. All this plan is doing is telling a private company that they will get less for their services than they would have before. Simple strong arm tactics that isn't reducing FEDERAL waste/payroll/duplicative/or just plain dumb spending. This is the easy way out and doesn't involve much thought as some bureaucrat will tell BMS or Glaxo that they'll give them x amount less. As a result corporate income will go down hence my comment that it is essentially a tax.
I feel like the discretionary agencies had to do this a year ago to the tune of 10%. I don't know if those cuts ever got enacted but discretionary spending was never really a problem. It's entitlements and defense; and to cut 10% from Social Security, Medicare, Medicaid or Defense is not a very popular option for anyone. But lets be honest, if you tell an agency to cut 10% it's going to come from salary or benefits they pay out, it's not like they go around buying everyone their own personal laser printers and they can cut back that way.
Now a real cut is saying that Agency X has to identify 10% budget cuts of their own choice in the next 6 months. If they don't my opinion is that the management of said agency loses 10% salary until accomplished. Lets get these fat cat big government lifers to cut the fat.