With no one in the White House or Congress seriously negotiating an alternative, the sequester – $1.2 trillion in across-the-board cuts to federal spending over the next decade – seems almost certain to kick in as scheduled on Friday. This didn’t have to happen.
The sequester – proposed by President Obama and approved by Congress – was designed to be a self-inflicted Armageddon, a consequence so horrible to contemplate that surely, surely both sides could work together to find a better alternative. Alas, they didn’t.
As of today, both the White House and GOP House members have shown no inclination to find common ground and avoid the sequester. Instead, both are concentrating their efforts on trying to ensure that the other side bears the blame after the cuts begin.
While the consequences of the cuts have been hyped, especially by the president on a road tour designed to highlight just who will suffer, a good deal of the pain will be real. Half the money will come from discretionary programs and half from defense – including $85 billion between now and Sept. 30.
That means a variety of popular domestic programs will go under the knife, and hundreds of thousands of civilian workers at the Pentagon could lose 22 days of work to furloughs. Entitlements, by the way, will go untouched.
Even if the potential fallout from the cuts has been exaggerated, they are likely to be a giant drag on the economy, slowing the recovery and increasing unemployment.
Again, this didn’t have to happen this way. And our dysfunctional government didn’t even have to come up with its own alternative plan.
Alan Simpson and Erskine Bowles, who headed the commission tasked in 2011 with devising a deficit reduction plan that would be acceptable to both Democrats and Republicans, are back with a new plan. Called “A Bipartisan Path Forward to Security America’s Future,” it provides a sensible combination of budget cuts and increased revenues to reduce the federal debt by $2.4 trillion over 10 years in addition to the $2.7 trillion savings already achieved.
Both men concede that the plan is imperfect. But, they say, “it could serve as a mark for real bipartisan negotiations on a plan to reduce the deficit and grow the economy.”
The plan also has the advantage of a head start. The first two steps of their four-step approach already have been achieved.
First were spending cuts enacted as part of the 2011 deal to increase the debt limit. Then there was increased revenue from an agreement enacted Jan. 2 to allow a temporary payroll tax cut to expire and to increase tax rates on annual household income of more than $450,000. (Remember the “fiscal cliff”?)
The next step would be to enact serious entitlement and tax reform to produce about $2.4 trillion in deficit reduction and replace the $1.2 trillion in automatic spending cuts in the sequester. The fourth step would be to take action to make Social Security and highway funding solvent and Medicare sustainable.
Perfect or not, the plan provides a starting point and framework for addressing the deficit and preserving vital programs and services. Unfortunately, it’s probably too late to negotiate an agreement before Friday.
That leaves undoing the sequester as the only sensible alternative. And if Washington ever decides to get serious about finding a solution to our economic problems, turning to Bowles-Simpson 2 is a better idea than another self-inflicted crisis.