The Sequester: Wasting a Crisis

Both sides have found silver linings in letting the cuts kick in: Democrats can blame the Republicans for their intransigence, and Republicans can say they slashed government spending.

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President Barack Obama, surrounded by emergency responders, urges Congressional action to prevent automatic spending cuts scheduled to begin on March 1, in the South Court Auditorium of the Eisenhower Executive Office Building in Washington D.C., on Feb. 19, 2013.

Standing in front of dozens of uniformed first responders, President Obama on Tuesday warned Congress that  “hundreds of thousands of people will lose their jobs if a March 1 sequester is allowed to take effect. Then he added, “The unemployment rate might tick up again.”

The event was the first in a series the President has planned this week calling on Congress to act. The conversation will be mostly one-sided as both chambers of Congress are in recess for President’s day, their members not planning to return to Washington until just three days before the deadline. Nevertheless, House Speaker John Boehner’s office was quick to respond to the President’s remarks. “Today the President advanced an argument Republicans have been making for a year: his sequester is the wrong way to cut spending.” Boehner said. “That’s why the House has twice passed legislation to replace it with common sense cuts and reforms that won’t threaten public safety, national security, or our economy.”

At stake is $85 billion in across-the-board, automatic spending cuts created back in 2011 as part of the debt ceiling deal. The cuts were meant to offset the amount the debt ceiling was being raised as demanded by Boehner. In 2012 a super committee tried but failed to come up with a more sensible way to enact the cuts – with a scalpel rather than a “meat cleaver,” as Obama put it on Tuesday. The cuts, which will force layoffs of hundreds of thousands of first responders, teachers, Pentagon and other Administration employees, were meant to take place January 1 but were delayed three months in order to give negotiators more time. With ten days left, time is now running out.

Both sides have approved plans to avoid the pain but neither party is ready to compromise with the other. The House Republican proposal redistributes the coming cuts to other areas of the government – areas like entitlements and education that Democrats are seeking to protect. The Senate Democratic plan avoids the cuts by closing certain loopholes — most of which affect businesses.  “So now Republicans in Congress face a simple choice: Are they willing to compromise to protect vital investments in education and health care and national security and all the jobs that depend on them?” Obama said, gesturing to the first responders behind him. “Or would they rather put hundreds of thousands of jobs and our entire economy at risk just to protect a few special interest tax loopholes that benefit only the wealthiest Americans and biggest corporations? That’s the choice.”

Republicans say the time for raising new revenue is past, in part because many Republicans agreed in the lame duck session to increase personal income tax rates for those who make more than $400,000 a year. “Just last month, the president got his higher taxes on the wealthy, and he’s already back for more,” Boehner said. “The American people understand that the revenue debate is now closed.”

So, for the fifth time in two years, the world economy and Washington are all taking their place on the brink of dysfunction. Only, this time both sides believe the sequester will take effect — at least for a few weeks.  Both sides have found silver linings in letting the cuts kick in: Democrats can blame the Republicans for their intransigence, as Obama will be doing all week, and many believe the sequester could cost Boehner the House in 2014 given the number of vulnerable Republicans in districts that are reliant on defense contracts for jobs.  Republicans, looking over their shoulders at Tea Party primaries, can say they slashed government spending and stood up to Obama.

And in any case, another cliff is just down the road. On March 27 funding for the federal government runs out, lining both sides up for a potential government shutdown. Whatever deal is forced out of those negotiations, most people expect will include some mitigation of the worst of the sequester’s effects.

Washington has so many crises stacked up that both sides have the room to let this crisis happen and then unwind its most severe effects when the next one appears.