More tough battles ahead: President Obama, pictured after meeting congressional leaders March 1, to discuss government spending cuts. Photo: AP

Government Shutdown at Stake

With the budget sequester spending cuts now slowly taking effect, the next big date on Washington’s calendar is March 27^th.   That’s the day the current U.S. government funding bill expires and Congress will have to act to either renew the funding measure or reach agreement on an alternative.

The big question now is will the spending cuts totaling $85 billion be included in the new funding bill, or will a fight over continuing the cuts spark a government shutdown?  Based on recent comments from both President Barack Obama and Republican House Speaker John Boehner, it seems both sides are eager, at least for now, to avoid another drawn out battle over the budget.

Republicans seem quite happy to renew the funding bill through the end of the fiscal year at the end of September as long as the sequester cut remains in the final amount.  That leaves it up to the president and his Democratic allies in Congress to decide if they want to try to undo the sequester cuts or push for a package of alternative cuts that would replace the across-the-board approach that equally targets military and domestic spending.

Republicans United on Cuts

House Speaker John Boehner talks about government spending cuts February 25, after meeting with his fellow House Republicans. Photo: AP

Republicans seem to be in the driver’s seat on the issue of cuts.  They are united for once, no mean feat for a party that has had some stark moments of disintegration over the past year.  With House Speaker John Boehner as front man, Republicans in Congress have rebuffed the president at every turn when he tries to push the idea of closing tax loopholes for the wealthy as a way of creating an additional revenue stream that could be added to the mix for deficit reduction.  The Republicans are adamant that the president got his revenue increase at the beginning of the year when he was able to raise taxes on the rich.  Speaker Boehner, under pressure from stalwart conservatives inside the House Republican conference, insist the Republicans y won’t permit anything further on the revenue front.

Republicans also know they can do nothing and can still get their way.  The Democrats would have to propose an alternative set of cuts to replace the so-called sequester, and if it includes higher revenue, the Republicans will reject it out of hand.   By pushing to block or undo the sequester, the Democrats would be put in the position of risking a government shutdown, for which they would get most of the blame, something they will probably choose to avoid at this point.

Sequester Impact Long Term

Right now, the public seems to be greeting the budget cuts with a collective “ho-hum,” despite the dire warnings from the president and other Democrats. But over time things could change and so too could the public’s apathy.  Cuts that affect air travel, border security and early childhood education could have a more dramatic toll a few months down the road but probably not before the government funding bill expires on March 27^th.  President Obama seems to think that public pressure later on could change the political dynamic, but it’s simply too soon to know.

Republican congressman Paul Ryan, shown here in June of 2012, is expected to present his party’s latest budget plan later this month. Photo: AP

Later this month, House Republicans are expected to release their long term budget plan that lays out a path to wipe out the budget deficit over a 10-year span.  The plan will be put forward by Representative Paul Ryan of Wisconsin, the House Budget Committee chairman and the Republican Party’s vice presidential candidate last year.

Unlike the sequester plan, the House Republican plan will deal with cuts or changes to popular entitlement programs like Medicaid, Medicare and Social Security, and that could spark a negative reaction from the public.  Republicans could be in jeopardy of getting in the way of their own success by pushing too hard for future cuts just when this year’s initial cuts are going into effect, risking another negative public backlash.

In fact, both parties of late have a way of pushing their own agendas too far and ignoring the desire of much of the public to find some common ground and solve problems.  President Obama continued to push the idea of closing tax loopholes for the rich even after he got his tax increase just a few months ago.  And now I can see Republicans trying to double-down on their budget cutting success by pushing a much broader program of reductions at the public before most people have had time to digest the cuts just going into effect.

Challenges for Both Parties

Some Republicans worry that by putting out an austere 10-year plan to balance the federal budget they will be seen by the public as a bunch of sour-pusses running around and cutting everything in sight.  And they will be fighting this battle even before the dust clears in the battle over the sequester cuts.

These Republicans argue that the party must do more to project a more positive, hopeful image moving forward, especially for younger voters who are more apt to listen to politicians emphasizing a bright future of opportunity as opposed to a stark wasteland created in the cause of a balanced budget.

As for the Democrats, some moderates are wondering what it will take for the president’s party to face up to some tough decisions on entitlement programs.  As the baby boomer generation begins to retire in earnest, Social Security and Medicare will begin to strain under the weight of millions of retirees looking for benefits that they have been counting on for decades.  Any changes to these programs are politically risky, but especially for many Democrats who campaigned on protecting them in last year’s election.

The sequester cuts shielded Social Security, Medicare and Medicaid, which account for about half of government expenditures.  There is simply no way to move toward a balanced budget over the next 10 to 20 years without some sort of cost controls on these entitlement programs.  The problem is neither party wants to be the first to stick its toe in the water, so both sides stand on the lake shore freezing, waiting for the other guy to make the first move.