The sequester cuts that started to take effect March 1 were not the result of Washington’s typical inability to act. In fact, the cuts were the result of an agreement by both Democrats and Republicans during negotiations in 2011.
The problem is that the sequester is an incredibly stupid way to cut federal spending. Furthermore, both sides knew that from the start.
The across-the-board sequester cuts were designed as a doomsday device, so unpalatable to both sides that they would be motivated to come up with a sensible alternative plan. They appointed a “supercommittee” to work out a deal and gave themselves a year to negotiate.
The result? Failed negotiations and no deal.
To a large degree, this was the result of pressure from tea party conservatives in the Republican Party and a miscalculation on the part of the White House. The White House had assumed that sharp reductions in military spending, which accounts for about half of the $1.2 trillion cuts over the next decade, would be unacceptable to congressional Republicans.
But many tea party Republicans are more amenable to cutting Pentagon spending than their colleagues. And many deficit hawks in the party decided that, while this might not be the best way to cut spending, they’d take what they could get.
So, the big question now is: What next? While members of both parties seem to have dug in their heels on how spending should be addressed, we hope they can at least work to improve upon the indiscriminate cuts required by the sequester.
Under the sequester, the cuts would hit every agency funded by discretionary spending controlled by Congress, including pay for civilian employees in the military. That affects only about a third of the entire budget.
Agency heads would have little or no discretion in where the cuts occur. They would not be permitted to look for fat in their budgets where cuts could more easily be absorbed.
Between now and the end of the fiscal year on Sept. 30, $85 billion will be cut across the board. That money won’t come out of the entire $3.7 trillion budget; it will come out of about $1.2 trillion. That’s a reduction of about 8 percent, a significant cut.
Entitlements such as Medicare, Medicaid, Social Security and food stamps – the biggest drivers of deficit spending – would be largely unaffected by the cuts. In other words, only about a third of the budget will take the brunt of the cuts.
But done judiciously, the budget cuts could help reduce federal spending without significant pain or reduction in services. We hope that, in lieu of another standoff, reasonable people on both sides of the aisle can work to find a mutually agreeable alternative to random across-the-board cuts.
The chances for that face significant hurdles. The Obama administration wants to replace the sequester cuts with a mix of cuts to entitlements and tax reforms, including closing of tax loopholes, that would produce more revenues.
Republicans say they will not consider any plan that raises taxes in any way. But they might be open to a deal to reduce cuts to defense.
On Wednesday, the House passed a bill that would give military and veterans programs officials more flexibility to shift the cuts around their departments to minimize impacts. But that is just tinkering around the edges.
Wednesday night, the president hosted a dinner with a group of Republican senators at a downtown hotel and planned to visit the Capitol this week. Maybe such get-togethers can prompt a plan to replace the sequester with something more sensible and keep the government running past March 27, when current funding authority runs out.
Under any circumstances, it seems that both sides are resigned to leaving funding for the rest of the fiscal year at sequester levels. The question will be whether the cuts will be made the smart way or the stupid way.