President Barack Obama meets with state governors February 25 and calls for their help in urging Congress to come up with a federal budget compromise before mandatory spending cuts March 1. Photo: AP

Chaos Ahead or Political Dud?

Welcome to “Sequesterville,” also known as Washington, D.C.  What was once unthinkable, and intentionally so, is about to become a reality.  Unless Congress and the president act soon, $85 billion worth of so-called “sequester” cuts take effect on March 1^st affecting both domestic and military spending.

It wasn’t supposed to be this way.  The idea of mandatory cuts was included in a budget agreement in 2011 as a way of ensuring that Democrats and Republicans in Congress, along with President Barack Obama, would find a way to compromise on long term spending cuts and tax revenues that would whittle down the national debt over a ten-year span.

Democrats would be compelled to find a way to compromise to avoid the across-the-board cuts in some domestic spending programs like early childhood education and health research.  Republicans, it was thought, would be eager to find a resolution to avoid the mandatory cuts that would hit the Defense Department, especially in the areas of training, maintenance and weapons acquisition.

Unintended Consequences

House Speaker John Boehner is leading Republican Party efforts in the House of Representatives to resist the president’s call for increased revenues as part of any new budget deal. Photo: AP

The 2011 budget agreement was designed to put the issue off until after last November’s election.  Mr. Obama won a second term and Republicans then found themselves in retreat early this year on the issue of tax cuts for the wealthy.  The president got his way on higher taxes, but many Republicans vowed at that point they had given enough.  With little to show for it in terms of real budget cuts, Republicans decided to fight on the issue of cutting government spending and took the risky stance of allowing the sequester cuts to go into effect unless they get their way.  Many of these Republicans are more concerned with disappointing conservative supporters back home than pleasing political moderates who find the idea of across-the-board budget cuts abhorrent.

Many Republicans are not happy about the defense cuts.  Defense hawks like Senator John McCain of Arizona and Senator Lindsey Graham of South Carolina are urging Republicans leaders to find a way to compromise to avoid hurting national security.  But it seems conservatives in the House of Representatives see an opportunity in the “sequester” for real cuts that they might not be able to get any other way.  So for now, most Republicans appear content to let the cuts take hold and see what happens.

Public Reaction in Doubt

Both sides seem to be counting on the public backing them up on the issue of spending cuts.  The Obama White House and congressional Democrats have been hammering away at the idea that the cuts would cause a lot of distress if they go into effect, from job losses to federal furloughs, to cuts in border patrols and long lines at airport security.  On the other hand, Republicans are counting on the public not noticing much of anything once the cuts go into effect, figuring that without public pressure the cuts will be more or less accepted and they can claim a major political victory.

The polls show Republicans are more vulnerable than the president right now in terms of who would be blamed for the cuts if they lead to significant disruption.  And going back to the government shutdown faceoff back in 1995 and 1996, Republicans bore the brunt of the blame while President Bill Clinton emerged as the big winner.  The risks this time seem even greater for the Republican side.  However, if they are correct and the public reacts to the sequester cuts with a big “so what?”, then they will have called President Obama’s bluff and may be in a position to push for additional cuts in the next fiscal year beginning October 1^st.

Smoke and Mirrors

Senate Republican leader Mitch McConnell is guiding the Republican budget process in the Senate. Photo: AP

Expect a lot of congressional debate and posturing this week, but analysts say it is unlikely that the two sides will be able to agree on an alternative strategy that will avoid the sequester cuts.  Democrats want a combination of closing tax loopholes for the wealthy and modest spending cuts, while Republicans might favor an alternative that is less harsh on the Pentagon.  But none of the alternatives now floating around Capitol Hill are likely to win enough bipartisan support to avert the sequester cuts.

Despite all the sound and fury expected this week on the Hill, it looks like both sides will spend most of their time trying to apportion blame in advance of the sequester.  Democrats will talk up the impact on real people, while Republicans will frame it as a key down payment on real spending cuts.  They will spend more time on the “blame game” than a fix, the latest example of how political polarization has led to political dysfunction in Washington.

The spending cuts will go into effect March 1^st, but the next key date on the calendar may be March 27^th.  That’s when the current temporary funding authority granted by the Congress is scheduled to expire, requiring lawmakers to act to keep the government operating.  Some analysts predict that if the budget sequester cuts remain in effect through March, it’s likely they will remain in place all the way through the end of the fiscal year through September.  Though it would also seem risky since the longer the sequester cuts take hold, the more the public is likely to notice and express outrage.

The eerie thing about this budget showdown is that neither side seems sure the public is with them.  They are willing to take a chance on letting things play out.  That means the public will likely turn the tide one way or the other, either through outrage or indifference.  At the moment, there is no shortage of opinion in Washington on how that will turn out.  The problem is they are just that—opinions—and nobody really knows for sure.    Buckle up!