With less than four weeks remaining before a March 1 deadline and an ideological budget divide deeper than ever, automatic across-the-board budget cuts — known in Washington as sequestration — may be an idea whose time has finally come. But don’t expect anyone to be happy about it. When Senator Lindsey Graham said, “I’m ashamed of the Congress,” his disappointment was genuine.
But when the cuts arrive, expect cynical finger-pointing all around. The pain of sequestration was intended to force a budget agreement. That deal never happened, but the harsh reality of honest spending reductions will surely open some eyes. That alone may be a silver lining that makes the whole exercise worthwhile.
Sequestration as a budget concept rose to prominence with the 1987 Gramm-Rudman Act. That law imposed across-the-board cuts if Congress failed to meet specific deficit-reduction targets. But unlike now, those goals could be met by spending cuts across the entire budget, higher taxes, or revenues generated by higher economic growth. At the moment, those options seem farfetched at best.
Start with the fact that the economy shrank in the fourth quarter of 2012. So arguing that a newfound growth spurt will help close the gap violates both budget rules and common sense (which don’t always go hand in hand). As an alternative, Democrats have suggested replacing some of the spending cuts with tax increases. Think again.
Beyond the fact that you can’t tax your way out of a spending crisis, Republicans just agreed to a $600 billion tax increase. In return, President Obama agreed to exactly no spending cuts. Let’s all hope that he enjoyed a few weeks of smug satisfaction, because the cost of that bad-faith negotiation was that no Republican in Washington will endorse any more tax changes until real spending cuts are signed, sealed, and delivered.
Hence the difficulty of devising a spending plan that will avoid the sequester. The $85 billion in cuts that it requires doesn’t look like a big number when placed alongside a $3.8 trillion budget. But once you set aside the long list of programs protected from the ax, choices become starker. With programs like Social Security, Medicaid, and food stamps off the table, the simple math calls for a reduction of 7.3 percent in most defense accounts and a 5.1 percent cut in most domestic programs.
To an outsider — that’s anyone who has worked in the real world — a 5-percent reduction in a business’ operating costs seems unlikely to cause paralysis. Companies make cuts of that size every year just to stay competitive. The suggestion that the government can’t improve its efficiency by 5 percent comes across as absurd. Not so in Washington, where budget increases are the norm in good times and bad.
But the politics of avoiding the sequester are convoluted. Any bill to revise the sequester must be bipartisan; a Democrat-only Senate bill cannot pass the House, and a Republican House bill is doomed in the Senate. Many liberals are loathe to give up the cuts in defense spending, while many conservatives are deeply tempted by the prospect of real reductions in domestic spending for the first time in 17 years. Building a coalition that will support a complex mix of tweaks and modifications to the scheduled cuts is political rocket science.
And by the looks of it, the daunting nature of this calculus is sinking into Congress’s collective psyche. Last week, there was more talk on both sides about the possibility, or even likelihood, of the sequester kicking in. Carl Levin, the chairman of the Senate Armed Services Committee, said the chances are “probably even.” Graham says it’s “likely,” while Paul Ryan, chairman of the House Budget Committee, predicts “the sequester is going to happen.”
Pundits might describe these statements as posturing, signaling, or even bluffing. In reality, something more telling is happening: By saying these things out loud, members of Congress are getting accustomed to the idea — or even comfortable with it. They see the train coming. They want to warn their constituents, get used to talking about it, and position themselves to say, “I told you so.”
For all the dramatic talk, no one really knows what will happen when the cuts go into effect. Despite the use of words like “drastic,” “deep,” and the ever present “Draconian,” Congress and the president both have tools to shift and reshuffle funds from one program to another. In the real world, it’s called setting priorities. In a world of trillion-dollar stimulus spending and unchecked spending increases, it’s unimaginable — until it becomes inevitable.