Congress Looks Past the Sequester Deadline and Braces for Long Fight

With just days before sequestration kicks in, Republicans have learned to love a policy they once claimed to loathe.

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Brooks Kraft / Corbis for TIME

U.S. Senate Majority Leader Harry Reid during a press conference at the U.S. Capitol on Feb. 26, 2013 in Washington, DC.

This should be a week of hushed meetings and late-night negotiations, with all of Congress scrambling to find a solution to Washington’s latest budget crisis. On March 1, a set of automatic spending cuts forecast to wallop the economy will kick in. But on their first full day back from a leisurely recess, Congress was in no hurry to beat the looming sequestration deadline. There were dueling press conferences instead of bargaining sessions, and political theater trumped actual progress toward eluding a budget policy designed to be disastrous.

Republicans once deemed the sequester a deterrent. But as the deadline draws near, they have learned to love a policy they once claimed to loathe — or at least to appreciate its hard-won cuts to federal spending. And so on Tuesday, as Barack Obama visited Virginia to detail the dire consequences, Republicans waved off the warnings about the impact of a policy that will cut each affected nonmilitary program by about 5% and defense programs by 8%. The President, said Wyoming Republican John Barrasso, is “running around the country, crying wolf, saying that the sky is falling” in order to spook voters and ratchet up public pressure on Republicans to raise taxes. “We’re not buying it.”

As they shuffled through the Capitol’s gilded halls after feasting on catered lunches, senators acknowledged that with just two days until the sequester takes effect, there was no visible path to avoid the $85 billion in spending cuts that independent forecasters say will disrupt the essential functions of government, cost up to 700,000 jobs this year and shave economic growth by half.

Each Senate caucus will have the chance to bring a bill before Barack Obama is forced to initiate sequestration on Friday. Democrats plan to push a bill that would replace the sequester’s indiscriminate cuts with a combination of targeted funding reductions and tax increases on high earners. Republicans, meanwhile, are likely to propose a measure, backed by Senate minority leader Mitch McConnell, that would grant Obama greater leeway over how to implement the cuts in hopes that he would shoulder the public backlash as well. But Senators in both parties complain that such a proposal would relinquish Congress’s power of the purse — even if that power has been used, in this case, to write a bad law. “They call it flexibility, but it’s really an abdication,” says Democratic Senator Carl Levin of Michigan.

Neither Senate bill is likely to muster enough support to clear the 60-vote threshold. House Republicans, meanwhile, are waiting until “the Senate gets off their ass and begins to do something,” House Speaker John Boehner huffed Tuesday morning. Thus Capitol Hill is in a holding pattern. Both sides say they have the upper hand politically. Both insist the other’s policy demands are a nonstarter.

Where does this leave the U.S. economy? Unlike the debt-limit standoff, which could have immediately triggered a global economic crisis, the first days of sequestration will inflict relatively mild damage. While some impacts will be felt right away, the majority of the pain will be postponed until at least late March. Even if the sequester takes effect, its impact could be mitigated whenever Congress rewrites the law. One possibility is that it does so as part of a deal to avert a government shutdown by March 27, when federal funding is scheduled to run dry.

But even the looming threat of a government shutdown may not be enough to spur Congress. Over Democratic objections, House Republicans plan to introduce a bill, perhaps as soon as next week, that funds the government at the levels set under sequestration. “We certainly won’t accept spending levels above that,” says House Republican Mick Mulvaney of South Carolina.

Mulvaney says that at a January retreat at a posh resort in Williamsburg, Va., House Republicans came up with a new strategy to slash spending, the party’s lodestar ever since the Tea Party wave of 2010 returned the GOP to the majority in the lower chamber. No more one-on-one negotiations with Obama. Wait out the Senate rather than submit to tough votes on bills that couldn’t pass the upper chamber. “We came up with a plan. We’re working the plan,” Mulvaney says. “The first step was to pass No Budget, No Pay. The second step was to make sure the sequester goes in. Pass the CR at Budget Control Act levels. And then Paul [Ryan] passes his 10-year budget.”

“This is our attempt to move the debate onto ground that is more favorable to us,” Mulvaney adds. “I don’t think I’ve seen our conference as unified as we’ve been since Cut, Cap and Balance,” back in the summer of 2011.

Which is why these budget negotiations are shaping up as a long slog. For all the Republican rhetoric about reinventing the party, and shifting away from the succession of budget spats that consumed Congress and dragged down the GOP’s approval ratings, Capitol Hill on Tuesday seemed transported to a bygone Tea Party heyday, with both sides digging into their trenches and no legislative solution in sight. “Congress can replace these cuts anytime with just a little compromise,” Obama said Tuesday as he pressed lawmakers to replace the sequester during a visit to a shipbuilding company in Newport News. But compromise has been in short supply on Capitol Hill, and there’s no sign that one will emerge anytime soon.

109 comments
TimeToStandUp
TimeToStandUp

First thing the President should do on Friday is order the GAO and any other federal office the executive would control to stop delivering toilet paper to the House Capitol Building, furlough the custodians, no more gas for their cars, no more heating oil for their offices, ANYTHING that he could do to take away something from the Republicans in the House and Senate so they too will feel the pain that they are inflicting on the country. TWO years they have had something on their plate that they put there and they haven't done a damn thing! They ran on jobs, jobs, jobs, in 2010 and haven't done anything to promote that. If I don't work I don't get paid, perhaps the President can order something curtailed or someone furloughed that would interfere with those lazy self-indulgent spoiled rotten Republican clowns getting their paychecks, or at least try to and say publicly what  just said.



santaellacarlos
santaellacarlos

@TIME @timepolitics Did anyone call the markets & explained them about sequester? Or, do they know something that we don't? ..hhhm..big sigh

eyemrazy
eyemrazy

@TIME @TIMEPolitics A good job, decision, legislation takes some time. And hopefully, we as a Nation are on the right path. Thank you.

kenjohnson1988
kenjohnson1988

@TIME @timepolitics #SMH #HalfHeartedLOL I know who could liven things up a bit!: @iamcolinquinn #funnyfelon

reallife
reallife

hmmm  nervous yet?... what if the sequester happens and nobody notices?   brrrr  cant even think of that....   bzzzz  bzzzzz

LaughinPaulRyan
LaughinPaulRyan

@TIME @TIMEPolitics ... @google this: ea1477 ea2233 sequester dr. ketchum ... #mjna #obamacare #whchat

camm11
camm11

We need TERM LIMITS for these jokers so they have to go out and get a real job and experience the destruction their brinkmanship has done the the economy ! 

raidx259
raidx259

Is it me or is this one of the most divided and non-functioning governments in recent memory?

branashton
branashton

House Republicans, meanwhile, are waiting until “the Senate gets off their ass and begins to do something" 

I can't believe Boehner has the audacity to say that... A clown leading the circus. 

MrObvious
MrObvious

Enough already; poll and poll shows that people want stability and solutions to problems. Maybe GOP didn't get the message but catering to a small dying base that think austerity is super awesome but really don't want any of their programs touched is a bad idea.

When GOP talk about uncertainty in the economy they conveniently ignore the fact that the greatest concern to businesses and regular folks is the constant brinkmanship. Solve the jobs issue and the deficit won't be a problem. Continue down the path of austerity and there will be a job issue for sure. It ain't rocket science - gov stands for about 20 percent of the economy. The BUY from PRIVATE companies. The government doesn't produce anything.

So every penny GOP takes out of government spending it also takes out of the economy.

Simple.

Smudpucker
Smudpucker

@TIME @TIMEPolitics No "Digging in" allowed... Get to work and fix this mess!!!

antonmarq
antonmarq

Ask the GOP they did with the $6 trillion they spent durung the Bush regime.

HajreinzayS
HajreinzayS

@TIME @TIMEPolitics I need news about india

muji_ali
muji_ali

@TIME @TIMEPolitics And the people are caught in no-man's land.

BobJan
BobJan

If republicans want to slash spending they can end 2 wars, 2 tax cuts, humongous drug plan giveaway, TSA and Homeland Security. The republicans with GW enacted it all and they can end it all. Then they can all quit. That will cut spending.  Then you can read the following and see how our Congress uses our taxpayer dollars as a piggy bank to enrich their donors.

http://www.nytimes.com/2013/01/20/us/medicare-pricing-delay-is-political-win-for-amgen-drug-maker.html?pagewanted=all&_r=1&

ZacPetit
ZacPetit

I have to agree with the more conservative commentators in this section. $85 billion annually out of $3.6 trillion annually is no where near enough. Parading the figure around as over a trillion in 10 years might not be dishonest, but its intent is.

There will be a point in the future (I suspect experts disagree on what this point is) when our current payment obligations to existing debt make taking out new debt prohibitive. We need to correct deficit spending to avoid this.

A way around cutting as many jobs when dealing with trimming the budget that I haven't heard discussed might be voluntary reassignment to another government position. Example: cut a program to design and build a new aircraft, send those engineers to NASA. Use part of the money that would have gone to a military industrial contract to fund a much cheaper space mission. There is probably no solution that will involve no casualties on jobs and economic production in some industry, but there probably is a solution that lowers production in certain industries and raises it in others in such a way that government spending decreases without resulting in a negative economic impact with respect to total GDP.

ZacPetit
ZacPetit

"...that independent forecasters say will disrupt the essential functions of government, cost up to 700,000 jobs this year and shave economic growth by half."

Sources?

ProtectAmericanJobs
ProtectAmericanJobs

The ONLY REAL FIX is to Raise Revenue, by Bringing Back Jobs to US Citizens who Pay Income Tax.

Massive cutting just puts more people on unemployment, which just depresses the economy even further.

Returning private sector jobs to American Citizens will provide income tax revenue to OUR Government versus our government having to pay unemployment benefits to those who would be jobless instead. We need our elected officials to Start Protecting American Jobs and do whatever it takes to bring back the jobs they let go. We need leaders who will actually stand up for the American people.

The bottom line is that “Our Government” has to protect domestic industry and the jobs that those industries provide. If they do that, the rest will take care of itself.

We may have to pay a bit more for products made here in the USA by US citizens, but at least we'll still have jobs and a future for our children.

TyPollard
TyPollard

@camm11 

Term limits are for people too busy or lazy to find out which politicians are grifters or not sane. 


BruceStrong
BruceStrong

@branashton Obama has stated that no deal will be made unless we INCREASE YOUR TAXES again, again and again...The Senate democrats have a plan, but it has no real spending CUTS only more taxes!!#$!!!^ Enough is enough on the FAIR SHARE Obama plan, cut Federal government spending NOW...

grape_crush
grape_crush

> When GOP talk about uncertainty in the economy they conveniently ignore the fact that the greatest concern to businesses and regular folks is the constant brinkmanship.

Well, yeah...creating crises for use as vehicles to ram through their failed policy (while blaming everyone else for the existence of the crises) has been the Republican method of operation for at least the past decade. 


stutzmandave
stutzmandave

@antonmarq The democrats and the Obama regime have more deficit spending than all previous presidents combined.

BruceStrong
BruceStrong

@BobJanand once again, what does that have to do with anything in the current situation????


ZacPetit
ZacPetit

@BobJan The only part of your statement that could possibly make a difference in eliminating the deficit is "end 2 wars." If by that you mean reduce the military budget then yes, that could help. Otherwise, you are talking about discretionary spending which can't eliminate the deficit, even if you cut all of it.

tom.litton
tom.litton

One more thing.  The freak out about the cuts isn't the amount.  It's the lack of planning.

tom.litton
tom.litton

@ZacPetit Government spending makes up a significant portion of GDP.  Cutting government spending would drop the GDP by the same amount (and employment as well).  

Normally the drop in GDP would mostly be made up by the private sector (since they compete in the same space, using less government resources, means there is more for private companies to use).  However, in this economy, that wouldn't happen.  What would happen is the GDP would drop, the unemployment rate would rise, and the tax revenues would decrease.

You also have remember that borrowing cost for the government are at an all time low.  It makes the most sense to invest in anything that will be needed in the next 10 years (ie infrastructure, research, etc), and have a plan in place to drastically cut spending 5+ years out when the government again starts to crowd out the private sector.   It's cheaper in the long run, helps the economy currently, and sets us up for an economic boom later.  

Will this happen?  No.  What will happen is cuts + revenue in the short term.  Then when the fiscal situation is better, there will be tax cuts + spending increases.  When the next recession hits, there will be record deficits and record debt to GDP ratio.   The cycle will repeat until the entire system collapses.  I'd bet money on it, but nobody will have enough pay me anyways.

grape_crush
grape_crush

> $85 billion annually out of $3.6 trillion annually is no where near enough.

What's the context of those cuts? What functions and services are they gonna affect?

I'm all for a responsible reduction in government spending. We just have varying ideas of what's considered 'responsible'.

grape_crush
grape_crush

> There will be a point in the future (I suspect experts disagree on what this point is) when our current payment obligations to existing debt make taking out new debt prohibitive. We need to correct deficit spending to avoid this.

Yes, the reality-based community recognizes that long-term debt is a future problem. Unemployment, depressed wages, and the shutdown of necessary services are short-term problems that will be detrimentally addressed by trying to solve the future one.  

“Moreover, besides having adverse effects on jobs and incomes, a slower recovery would lead to less actual deficit reduction in the short run.” 

Not that I'm a Bernanke fan, but I have no issues agreeing with people when they are pretty much right.

> Example: cut a program to design and build a new aircraft, send those engineers to NASA. Use part of the money that would have gone to a military industrial contract to fund a much cheaper space mission.

Or space missions. Or renewable energy and efficiency initiatives. Or hell, even new and improved public transportation. I do like the idea of re-dedicating our intellectual and fiscal resources to a more forward-looking peacetime R&D footing.

Problem is that it all would still have to be paid for, and that's the show-stopper on any good initiative at the moment.

bobell
bobell

@ZacPetit I have no complaint with increasing efficiency, but that isn't the current problem. Workforce efficiency continues to improve, but the economic benefits are accruing only to ownership -- the top one percent.  And your willingness to tolerate "casualties" goes against the basic proposition that we want to get out of this mess so we don't have to tolerate calsualties.

You really need to read Galbraith's "The New Industrial State." It's the ultimate cautionary tale.

roknsteve
roknsteve

@ZacPetit NASA is a big waste of money with their 50 year old technology.  

Diecash1
Diecash1

@TyPollard @camm11 I would generally agree with that statement, Ty, but look at the Congress -- it's atrocious.  While I don't really support term limits in principle, it may be worth a try at this point because, really, how much worse could it get?

stutzmandave
stutzmandave

@grape_crush You must be talking about your democrat friends. Obamacare, TARP, Stimulus packages, auto bailouts, ect., and now gun control. What legislation have republicans rammed through in the last decade in the guise of averting crisis?

BobJan
BobJan

@BruceStrong @BobJan Nothing, FOUR (4) TRILLION has nothing to do with it. We (citizens) need to send someone into the government and look at who keeps "cooking" the books. Republicans say one thing and the Democrats say another. Neither one tells the truth. It'll never end until the "money" is taken out of politics.

BruceStrong
BruceStrong

@grape_crush

The difference between your household budget and the federal budget is that you can't threaten people to give you money, and you don't claim that your thievery is actually good for the victims. If running deficits were good, you would be better off now than in 2008, when Obama began running deficits in excess of $1 trillion dollars per year. "There are some ideas so absurd that only an intellectual could believe them." — George Orwell

stutzmandave
stutzmandave

@grape_crush Why do you so strongly believe the government is a better steward of capital than the private sector?

ZacPetit
ZacPetit

@bobell The goal with shifting around the workforce paid by the government really wouldn't be an exercise in increasing productivity. If the argument against cutting government spending is (mostly) raising unemployment, then finding a way to keep those people employed while spending less money is the goal. The efficiency of the worker doesn't really enter into the equation.

My thought was basically to target programs that purchase expensive products - where salary consumes a (relatively) small portion of the project's budget - and shift those workers into a program or agency where payroll is a higher percentage of the program's cost. The cost to the economy then of cutting the first program is only the cost of losing the product, not the cost of losing the workers' productivity.

ZacPetit
ZacPetit

@roknsteve @ZacPetit Sure, what would you expect from an agency with 50 year old technology? Our county has had at least four significant economic booms: industrialization, production following the second world war, production following the space race, and the information revolution. Investing in technological innovation through NASA worked before, I'm not sure why so many people are against trying it again.

ZacPetit
ZacPetit

@bobell Thank you. These writers should be sourcing their information themselves! 

The article is also a bit factually incorrect according to the source. Economic growth is projected to fall around half a point, apparently. Not "by half," which would be just over a point.

Diecash1
Diecash1

@reallife  Why troll when you could get a life and be a productive member of society?

reallife
reallife

@Diecash1@TyPollard@camm11"With term limits, it might cost them more to essentially repurchase a legislator"

why buy a legislator when you can buy a president for 500k? 

TyPollard
TyPollard

@Diecash1 @TyPollard @camm11 

We disagree. The Progressive Caucus would be the baby thrown out with the bath water. Good people are too valuable and too rare.

Diecash1
Diecash1

@TyPollard @Diecash1 @camm11 You act like that (Koch brothers) isn't already happening on a large scale; it is.  With term limits, it might cost them more to essentially repurchase a legislator.

Regarding losing talented people, it happens in both systems.  All I'm saying is that, given the sorry state of our Congress, I could be swayed to support some sort of term limit arrangement, though I'm open to other ideas.  Something certainly needs to be done and it deserves careful consideration.


TyPollard
TyPollard

@Diecash1 @TyPollard @camm11

It could get worse. Term limits could allow the Koch bros. to fund an never ending stream of sycophants that would not be held accountable to act in the best interests of the voters.

Good representation is hard to find and I hate the idea of banishing truly talented and wise people because we are too lazy or misinformed to know the dif. I also blame the media which focuses on the trivial instead of important issues.


razorback10
razorback10

Edit: If something needs to be done for the betterment of the people as a whole, and a business can not do it reasonably for a profit then the gov't should step in to ensure that it happens because a private business will not do it for a loss.

razorback10
razorback10

It is not that the gov't is a better steward of capital, it is what the role of a business vs role of a gov't is.  A business is there to make money.  No other reason.  A gov't is there, ideally, for the betterment of the people.  This can take many forms.  If the sole method of bettering the people is to make them wealthy then it should do nothing. If something needs to be done for the betterment of the people as a whole, and a business can not do it reasonably for a profit then the gov't should step in to ensure that it happens.

Scientific research has largely been abandoned by companies as they look to shore up their accounting sheets.  R&D are only assets in the long term, which goes agains the grain of quarterly earnings reports.  Most (not all) research is actually done in universities or their affiliated institutions, which largely accept federal grants.  Most people (again, not all) accept that a better scientific understanding betters our society as a whole, but companies do not profit from it.  They primarily profit from the short term benefits of having specific technological problems solved for their product base.

This is only one example of how gov't is a better vehicle for improving society than a corporation.