February 26 2013
Sequester, Ahoy? Looks That Way...
The Obama administration has adopted a Henny Penny approach to the sequester.
This means that, if the sky doesn’t fall on Friday, when the sequester is scheduled to go into effect, the administration will be caught in an embarrassing situation.
Let’s hope that Republicans get out front on this and make the point out that the administration has an incentive to make the sequester as bad as possible (all the while noting, of course, that we know they are too public spirited to give into such an unworthy temptation).
National Journal has a piece headlined “U.S. Fiscal Future Likely Hinges on Public Reaction to Sequester.” That may be overstating the case, but the sequester will be the backdrop for looming financial discussions on Capitol Hill. The story says:
[T]he real drama will rest now on the public’s reaction to those cuts and how that might impact negotiations in coming weeks over the still-looming debt-ceiling crisis, funding for the government beyond March, and whether a way can be found to preempt—or at least better carry out—the sequester cuts.
How will this all play out? The impasse’s next milepost that may provide a glimpse of the strategies ahead could come next week, when House Republicans, led by Boehner and Appropriations Chairman Harold Rogers of Kentucky, are expected to bring to the floor a bill to extend government funding through Sept. 30, the end of the fiscal year. (The current stop-gap measure expires March 27)….
Rogers’s bill to extend funding for government through Sept. 30 could be a vehicle to at least allow more flexibility, for now, in how some of these cuts are carried out. Rogers has indicated that his bill is to be subject to the sequester. That means, if the sequester gets turned off, his bill would hold fiscal 2013 spending at $1.043 trillion. If not, it would reflect that the year’s spending cannot exceed about $976 billion.
But in a hint of where Republicans might be headed, Rogers also has said the bill would be structured in a way that would allow some flexibility or shifting within defense and veterans spending, while still adhering to the across-the-board approach to the cuts.
Do you realize that all this panic is over $85 billion in cuts? To put this in perspective, the Obama stimulus package was more than $700 billion. Are we to believe that a government that owes more than $16 trillion will grind to a halt over cuts of around two cents on the dollar?
President Obama held a private, no-press meeting with governors at the White House Monday, apparently to convince them that, if the sequester goes into effect the sky will fall. Governor Nikki Haley of South Carolina and other GOP governors were not favorably impressed:
“I could not be more frustrated than I am right now," Haley told reporters after the meeting. She said that when she asked Obama if he would consider a last-minute plan to shave about 2 percent from the annual federal budget without increasing taxes, the answer was "no."
"My kids could go and find $83 billion out of a $4 trillion budget," Haley said. "This is not rocket science."
The National Journal summed up why public reaction to the sequester will be so crucial:
Against this backdrop, both parties will be gauging the public reaction to the sequester cuts set to begin on Friday. Groups on all sides of the debate plan to highlight the effects of the cuts once they are officially in place, in an effort to sway public opinion. Obama and Democrats may be evaluating the reaction with an eye on whether a significant public outcry might work to their benefit as they press to replace some cuts with revenue from sources such as levying higher taxes on millionaires, reducing farm subsidies, and closing tax loopholes for oil and gas companies.
If the sequester is met with a shrug, Republicans could use a lack of significant public anger to press Obama and Democrats for still more concessions on the spending they see as a driver of the federal debt. Whichever way it goes, the sequester is set to start soon, and the public’s reaction to the cuts will likely set the stage for what lies ahead.
I don’t fear the sequester—but I do fear that it may be managed in a designed to convince the public that the sky will fall if we trim government spending by a minuscule amount.