By 11:59 p.m. on Friday, President Obama is required to initiate the budget process known as sequestration. Until now, the fate of these automatic spending cuts – which independent forecasters say will ultimately throw a wrench in the machinery of government, cost hundreds of thousands of job and slow economic growth – has been trapped in a pointless installment of political theater. The White House released reams of scary economic reports. The House deferred to the Senate, which finally on Thursday staged dueling stunt votes whose failure was a foregone conclusion. At which point Congress, having barely tried to avert a crisis of its own making, skipped town for the weekend.
On the day Obama is forced by law to trigger $85 billion in automatic budget cuts, a bipartisan delegation will finally trek down Pennsylvania Avenue to negotiate in person. But both sides are merely expected to restate long-held positions, giving the summit the whiff of a photo op. In fact, now that sequestration has arrived, the budget gridlock gripping Washington may be about to get worse.
That’s because the two parties are already looking ahead to the next skirmish: a fight over how to fund the federal government beyond the end of the month. For the past few years, with the formal budget process broken, Congress has kept the government running with a series of stopgap funding bills, known as continuing resolutions. By March 27, lawmakers have to pass a new one or the lights go off. Unlike the effects of the sequester, whose hazards are real but not immediate, a shutdown’s seismic impact would reverberate across the economy right away.
And here’s where the capital’s budget battles fold into one another, like evil Russian nesting dolls. One of the reasons many Tea Party Republicans considered the implementation of the sequester a “home run,” as Kansas Congressman Mike Pompeo put it, is it locks in federal outlays at a lower level, trimming the budget back to its George W. Bush-era totals. That’s a modest but hard-won victory for a party that has long sought to rein in government spending. Now that sequestration is law, the GOP gains the same kind of political advantage that Democrats possessed during the fiscal cliff fight, when taxes were set to go up with no further action.
As soon as next week, House GOP appropriators will introduce a continuing resolution which would include special protections for defense programs but not raise total spending. Republicans say they are open to letting Obama devise a more surgical method of removing $85 billion from the economy over the next seven months. Democrats reject that idea — indeed, they voted down one such GOP proposal in the Senate on Thursday — and argue there is no way to slash that deep without gashing the fragile recovery.“There is no way to cut spending this dramatically over a seven-month period without drastically affecting national security and economic priorities,” said White House Press Secretary Jay Carney.
The impending collision of these two convictions is why some Capitol Hill aides from both parties have been privately predicting a government shutdown for weeks or months. In the event of a shutdown, Republicans — who have far less public support than the President — run the risk of being punished by voters for overreaching. But they’re betting that voters will hardly notice the impacts of sequestration by the time the next budget deadline rolls around, and decide the new normal is something they can live with.
In the meantime, the sequester will begin to cascade across the country; at some point on Friday, Obama will alter the U.S. financial forecast with the stroke of a pen. No, the sequester isn’t a cliff, and perhaps not even a particularly steep slope, but it will ultimately reshape the contours of the American economy unless action is taken to change it. A senior administration official compares the March 1 deadline to a layoff notice: your routine and finances may not change much in the interim, but unless you come up with a way to replace the lost money, life is about to become very different. “This is an unprecedented set of circumstances,” the official says. “It’s challenging to plan for and implement effectively, because it’s a public policy that was never meant to be implemented.” And as budget officials wrestle with the sequester, the next cliff is already looming, just weeks away.
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