16 days and counting: A sequester status check

For those who fear the upcoming sequestration, the good news is that bipartisan opposition to the concept is growing and there are plenty of options to avoid the cuts. But the dilemma remains whether and how a deal can be crafted with alternative fiscal steps.

Across-the-board spending reductions of more than $80 billion for the next seven months are set to trigger in little more than two weeks as of this writing; projects are already being canceled and widespread furloughs are almost certain. President Obama and congressional Republicans, meanwhile, are playing yet another round of budget "chicken." Each side vows not to back down in the face of the budget ax.

The complex legislative and political dynamics have fueled the growing likelihood that the sequestration will take effect for at least a few weeks, as lawmakers struggle for alternatives. "It’s still a work in progress. This is really very complicated stuff," Senate Appropriations Committee Chairwoman Barbara Mikulski (D-Md.) recently told Congressional Quarterly.

Even amid the pessimism, the outlines of a prospective deal seem apparent. With Obama and other Democrats strongly opposed to additional cuts in discretionary domestic spending and Republicans adamant in rejecting new taxes, that leaves two broad areas for deficit reduction: cuts in entitlement programs and targeted trims in defense spending. Both parties have agreed on potential savings in each area—in concept, at least.

But closing a deal seems daunting. House Speaker John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.) are wary of another round of leadership talks with Obama. And House Republicans, for now, point to the two packages of alternative cuts that they passed last year, even though that legislation expired with last month’s start of a new Congress.

Senate Democrats have said they expect to offer later this month a "balanced" plan of spending cuts and tax hikes, consistent with Obama’s objectives. That would likely be too late to avoid the sequester, though it might be a step to resolve the extension of federal spending that expires on March 27. And in any case, House leaders typically insist on their constitutional prerogative to initiate revenue bills.

Congress also has another week-long recess scheduled for next week -- increasing the odds that the sequester will take effect at least temporarily. "The House should not recess and Members of Congress should not go home until we finish our work, reach an agreement, and avert this crisis," House Minority Leader Nancy Pelosi (D-Calif.) wrote to Boehner on Feb. 11. Boehner has said that the House is awaiting Senate action.

Each side ultimately may need to concede that it dislikes the alternatives, but that they are better than the fall-back position that will otherwise ensue. In Washington parlance, critics of the sequester have been resorting to the "Washington Monument" tactics of using worst-case scare tactics about the consequences of failure to act. (In this case, the Washington Monument won’t be affected: It already is closed to the public because of extensive repairs resulting from the 2011 earthquake. But the metaphor remains apt.) A similar scenario accompanied the New Year’s Eve plan to replace a scheduled increase in virtually all income-tax rates.

The White House released on Feb. 8 a six-page listing of the horrors that would accompany the automatic spending cuts and would "threaten thousands of jobs and the economic security of the middle class." It focuses on the real-world consequences, not on Washington budget-speak.

The most damaging effects began with, "70,000 young children would be kicked off Head Start, 10,000 teacher jobs would be put at risk, and funding for up to 7,200 special education teachers, aides and staff could be cut." The litany continued with cuts to small business loan guarantees, furloughs of prosecutors and other law-enforcement officers, and a halt to scientific and research grants from the National Science Foundation and other agencies.

Although the White House fact sheet did not mention Defense Department cuts, a less prominent Pentagon announcement two days earlier dramatically illustrated the immediate consequences: The planned deployment of the aircraft carrier Harry S Truman from Norfolk Virginia to the Persian Gulf had been postponed. Among other factors, the battle group did not have enough trained personnel.

The national-security cutbacks come at a bad time, as the Obama Administration plans executive actions in response to cybersecurity attacks and other threats to technology from overseas and rogue forces. Outgoing Defense Secretary Leon Panetta has repeatedly warned that the sequester cuts would turn the nation into "a second-rate power."

Other options to the sequester clearly are available. Obama and Boehner had tentatively agreed in two separate negotiations to modest changes in the cost-of-living index that computes Social Security benefits as well as income-tax brackets. Such a change likely would not interfere with Republican plans this year for more sweeping tax reform. But the negotiators backed off each time under pressure from renegades in both parties.

Federal-worker unions have protested proposals from congressional Republicans to extend the pay freeze and impose further pension restrictions on government employees. The White House has indicated that Obama likely will call for a one percent pay hike in his upcoming budget.

At the same time that both parties struggle with the sequester, plus the March 27 deadline to extend appropriations bills across the government, Obama has delayed until mid-March his planned filing of the Fiscal 2014 budget. Ordinarily, that would have been submitted to Congress by early February. That delay, in turn, will squeeze House and Senate action on next year’s budget plan, which they are required to approve by April 15.

The timing of the budget follies and overall uncertainty risk further damage to the economy. Growth late last year was zero, a drop from the already anemic economic increase of roughly two percent. Job losses among large defense contractors are expected to further weaken economic performance, as advocates of the sequestration have conceded.

And at this point, members of Congress seem as dumbfounded as the agency employees about to be hit by the cuts. At a Feb. 12 Senate Armed Services Committee hearing on the impacts of sequestration, Sen. Angus King (I-Maine) declared: "A portion of the United States government is essentially talking about going out of business because of decisions made somewhere else in the government.... This whole thing is dumb. It's an arbitrary date, it means nothing. ... It's a totally self-imposed deadline and the impacts will be drastic."