Dreaded sequester looming, Congress demands White House identify cuts

After the hullabaloo of the Senate’s vote to extend the Bush tax cuts for one year on household income up to $250,000 on Wednesday, the chamber quietly passed another piece of legislation that may do much more to inform debate on Capitol Hill once lawmakers return from their August recess.

By unanimous consent, the Senate agreed to a bill that would require the White House to outline what budget items would be cut under the budget-slashing “sequester” within 30 days of the law’s enactment. That bill, previously passed in the House 414-2, heads to President Obama’s desk for a signature.

While members of both parties have decried the sequester, the fact that the $109 billion in reduced spending come January does not specify which programs will be cut has caused additional anxiety on Capitol Hill. What this legislation would do, Congress hopes, is frame the argument in terms of concrete priorities rather than large, hard-to-grasp dollar figures.

The sequester is Washington shorthand for the automatic spending reductions mandated by the Budget Control Act, the compromise legislation that ended last summer’s debt-ceiling fight. That legislation increased America’s loan limit in exchange for imposing spending caps on the 10 years of federal budgets. It also required Congress to find an additional $1.2 trillion in cuts over the next decade, either by negotiation, which failed, or by sequester: $600 billion in defense and $600 billion discretionary spending on items like social services and education.

Both parties say the cuts are abhorrent – but a special committee of 12 lawmakers from both chambers couldn’t find a formula for offsetting the planned reductions. As such, they’re slated to hit the economy come Jan. 1.

When the administration's Office of Management and Budget reports back on the cuts, laying out specifically what the sequester will touch if allowed to go into effect, that will come on the heels of an intense campaign from members in both parties to discuss the cuts over the August recess and their respective party conventions at that month’s end.

Republicans in the Senate are so incensed by the possibility of deep defense cuts that they will be holding a series of town halls across the country in coming weeks to discuss the issue with veterans and military members in key swing states. A trio of GOP senators – John McCain of Arizona, Kelly Ayotte of New Hampshire, and Lindsey Graham of South Carolina – will make stops in Florida, North Carolina, Virginia, and New Hampshire on Monday and Tuesday of next week.

The events will, in part, help sharpen the GOP’s attempt to lay responsibility for the sequester on Mr. Obama and Democrats, even though many Republicans (including the party’s leadership in both houses of Congress) voted for the legislation that brought the sequester into law.

“The president owes it to our forces around the world and to their families to put a plan on the table for all to see now, rather than waiting until after the November elections pass,” said minority leader Mitch McConnell (R) of Kentucky on the Senate floor last week. “To keep these details secret and to leave the defense sequester in place as written would be irresponsible, regardless of the outcome of the presidential election.”

On the left, the top Democrat on each House committee sent a letter to House Speaker John Boehner (R) of Ohio on Wednesday urging a return to negotiations to undo the sequester. The letter argued that negotiations should begin immediately so that a resolution might be reached before the fiscal year ends on Sept. 30. At that date, Congress would need to lay out government funding levels for the next year. 

“The looming possibility of a January 2013 sequester is already creating uncertainty in our economy. Working together and in good faith, Democrats and Republicans can negotiate an alternative to the defense and non-defense discretionary sequester as well as the mandatory sequester for fiscal year 2013,” the Democrats wrote. “We are confident that we can identify revenue sources and prioritize investments in a bipartisan fashion to avoid the sequester while achieving our deficit reduction goals.”

With such negotiations unlikely, Democrats will strive to paint the GOP as unwilling to come to a reasonable compromise. That was the tone struck by Sen. Patty Murray (D) of Washington at a speech at the Brookings Institution last week, where she vowed that Democrats would allow the nation to barrel through the sequester and some $500 billion more in higher taxes and lower spending set to hit the economy at year’s end, if Republicans would not accept raising taxes.

“[I]f we can’t get a good deal – a balanced deal that calls on the wealthy to pay their fair share – then I will absolutely continue this debate into 2013, rather than lock in a long-term deal this year that throws middle-class families under the bus,” Senator Murray said.

While many on Capitol Hill have largely ignored the cuts to non-defense discretionary spending, Sen. Tom Harkin (D) of Iowa released a report Wednesday putting the cuts to that forgotten half of the ledger in stark terms.

Senator Harkin’s report argues that 46,000 Americans in the education field would lose their jobs if the full sequestration were to go into effect alongside 1.6 million who would lose job training and employment services. Healthcare screenings for various diseases would plummet.

“A laid-off teacher is just as unemployed as a laid-off defense contractor,” said Harkin.  
 
What have the parties done thus far to avoid the sequester?
 
Republicans in the House, in fact, passed a spending reduction bill that would cancel the sequester in May. That bill, championed by House Budget Committee Chairman Paul Ryan (R) of Wisconsin, would have done away with the sequester by lowering overall government spending, leaving in place planned cuts to Medicare providers and added additional cuts to healthcare while increasing federal pension contributions.

"House Republicans remain committed to the full spending reduction required by the Budget Control Act, but we have a plan to replace the arbitrary cuts to our defenses with responsible spending cuts and reforms,” said Rep. Jeb Hensarling (R) of Texas, the House’s X-ranking member of the GOP leadership, in a statement. “The president and Senate Democrats do not.”

Democrats offered a plan during the initial negotiations over avoiding the sequester that paired $1 trillion in spending cuts with $1 trillion in higher tax revenues but have not made any concentrated overtures toward ending sequestration since.

While the legislation passed Wednesday in the Senate will force the sequestration issue into concrete terms, it cannot move Congress to do what it is has been unable to achieve thus far: find common ground.

“Sequestration,” said Senator Murray in a statement after the Senate passed the sequestration transparency bill, “is not going to simply disappear because both sides want to avoid it.”