As the clocked ticked down on the sequester -- $85 billion in budget cuts that will run through the end of the fiscal year -- President Obama and congressional Republicans were busy blaming each other for the plan that was enacted to force Congress to reform the tax code and spending to keep the meat-ax approach to reducing the $1 trillion budget deficit from taking effect.
The sequester was adopted as part of the Budget Control Act of 2011 that allowed an increase in the debt ceiling on the theory the 10 percent across-the-board cuts to defense and discretionary spending were so onerous, Congress would act to avoid them. A White House memo this week estimated defense will take a 13 percent hit and domestic agencies will see 9 percent of their budgets vanish.
"The whole design of these arbitrary cuts was to make them so unattractive and unappealing that Democrats and Republicans would actually get together and find a good compromise of sensible cuts as well as closing tax loopholes and so forth," Obama said in explaining why sequestration was adopted. "And so this was all designed to say we can't do these bad cuts; let's do something smarter. That was the whole point of this so-called sequestration."
So much for that idea. In fact, the conservative groups Americans for Prosperity, Club for Growth and FreedomWorks urged Republicans to hold firm and allow the cuts to take effect.
The Congressional Budget Office has estimated the cuts will cost 750,000 jobs this year and advised agencies to restrict hiring, travel and employee bonuses. The OMB also suggested "delaying awarding of new financial assistance obligations, reducing levels of continued funding, and renegotiating or reducing the current scope of assistance, ... [and reducing] the level of assistance provided through formula funds or block grants."
A last-ditch meeting at the White House Friday produced no resolution.
"The president got his tax hikes on Jan. 1," House Speaker John Boehner, R-Ohio, told reporters after the meeting. "This discussion about revenue in my view is over. It's about taking on the spending problem here in Washington.
"I did -- I acted. The House is going to move a continuing resolution next week to fund the government past March 27. I'm hopeful that we won't have to deal with the threat of a government shutdown while we're dealing with the sequester at the same time."
Obama warned the economy is going to take a hit.
"The longer the cuts stay in place, the greater the damage to our economy," Obama said after the meeting.
On Thursday, the Senate rejected rival Republican and Democratic bills to avert the sequester -- the GOP measure winning only 38 votes and the Democratic bill getting 51, both short of the 60 votes needed to end dueling filibusters.
Instead of acting to avoid cuts that will damage anti-terror efforts and military preparedness, the air traffic control system and myriad social programs, Senate Minority Leader Mitch McConnell, R-Ky., keeps reminding us the sequester was an administration idea and accuses Obama of wanting to make it hurt as much as possible.
"Instead of directing his Cabinet secretaries to trim waste in their departments, he's going to go after first-responders and teachers ... and somehow, it will be everyone's fault but his," McConnell said.
Rep. John Kline, R-Minn., told The Hill he thinks Obama has made a tactical error by using campaign-style tactics to try to move the issue forward.
"It is strange to have President Obama's arm reaching out and attacking members of the House Republicans when in theory he's trying to work with us," he said. "I'm not sure how smart that is. If he really wants cooperation, why would you just sort of, intentionally antagonize? I don't know.
"The well is fairly poisoned right now."
At the same time, Obama keeps saying the lack of progress on averting the spending cuts is the GOP's fault -- largely because of the Republican aversion to increasing tax revenues.
"There are too many Republicans in Congress right now who refuse to compromise even an inch when it comes to closing tax loopholes and special interest tax breaks. That's what's holding things up right now," Obama said during an appearance Monday at the Newport News, Va., shipyard.
The Office of Management and Budget issued an assessment of the Senate Republican plan, saying it "would protect tax loopholes for the wealthy and congressional pork barrel projects and would lock in severe cuts that threaten hundreds of thousands of middle-class jobs and slash vital services for children, seniors and our troops and military families.
"Rather than proposing a comprehensive solution to avoid the cuts and their harmful impacts to the economy, this bill would cancel $85.3 billion in budgetary resources in FY 2013 and purportedly provide the president with flexibility in executing the reductions. While no amount of flexibility can avoid the fact that middle-class families will bear the brunt of the cuts required by this bill, nothing is asked of the wealthiest Americans.
"There is no way to cut spending this dramatically over a 7-month period without drastically affecting national security and economic priorities."
White House spokesman Jay Carney told reporters Boehner and Obama actually agree on some principles.
"The fundamental difference here now seems to be not that we shouldn't close loopholes and cap deductions for the wealthiest individuals and corporations that are given special treatment in the tax code -- the speaker seems to agree with that," Carney said. "The disagreement here now seems to be that he believes that the savings from that action, the savings from closing those loopholes, should be funneled back to the wealthiest individuals in tax cuts.
"We believe adopting a conservative position that savings should be applied to deficit reduction, and thereby by applying that savings to deficit reduction we're not asking seniors and middle-class families to bear the burden of deficit reduction all by themselves -- and that's a pretty conservative position. That's a pretty reasonable, middle-of-the-road, commonsense approach to both tax reform and entitlement reform."
Posturing aside, the sequester promises to have real-world consequences.
The National Employment Law Project notes 2 million workers will see an 11 percent reduction in their federal jobless benefits, probably as early as April. NELP said by the end of the fiscal year 4 million long-term unemployed will be affected by $2.3 billion in cuts. In addition, state agencies that process unemployment benefits will lose nearly $200 million in administrative funding, likely affecting claims processing.
Nonetheless, Americans apparently have disconnected from this latest fiscal crisis, with nearly one in five in a Gallup survey released this week saying they don't much care if the cuts go into effect and 37 percent saying the cuts should take hold. The survey, conducted Monday and Tuesday, queried 1,017 adults. The error rate was 4 percentage points.
University of Maryland economist Peter Morici notes Obama has some discretion in how the cuts are implemented but accuses the president of refusing to mitigate the impact on the public.
"For example, the Agriculture Department has one of the largest staffs of economists in the world -- surely, safe food is more important than yet another dull research paper," Morici said. "Military bands could stand down to maintain Marine guards at embassies."
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