Coming Sunday
Some blame divided government for the stalemate that has ground legislative progress to a halt. Is Congress workable when one party controls one house of Congress and the opposite party controls the other? Read the story from our Washington Bureau reporter Jack Torry in Sunday’s paper.
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Congress went home for the weekend without meeting Friday’s deadline to reverse the first round of the $1.2 trillion in federal budget cuts scheduled to hit over the course of the next decade.
The immediate impact of the cuts on the public is uncertain.
With no last-minute plans to seek a delay in the looming cuts, President Barack Obama invited House Speaker John Boehner and the other top leaders of Congress to a White House meeting Friday.
It was not clear whether he would seek negotiations to replace the across-the-board cuts before they begin to bite.
“The sun will come out tomorrow,” said Rep. Jim Jordan, R-Urbana, calling the cuts a victory for taxpayers and “a good first step” and saying the impact will not be nearly as dire as the White House has predicted it will be.
The House did vote on the budget cuts Thursday, which will amount to an authorized reduction of $85 billion in spending, although the Congressional Budget Office reported that the cuts actually would be closer to 44 billion in real dollars through the end of the year. The Senate took up Democratic and Republican measures aimed at addressing the cuts, but neither passed.
In a written statement after the votes, Obama said, “We can build on the over $2.5 trillion in deficit reduction we’ve already achieved, but doing so will require Republicans to compromise. That’s how our democracy works, and that’s what the American people deserve.”
Across the Capitol, Boehner led the chorus of Republican critics, saying that “Obama and Senate Democrats are demanding more tax hikes to fuel more ‘stimulus’ spending.”
Boehner, R-West Chester Twp., and House Republicans show no hurry to alter the cuts, contending they provide leverage with Obama in their demand for savings from government benefit programs. Yet they are expected to launch legislation next week to replenish government coffers after current funding expires on March 27, and that measure could become a magnet for new attempts to change Friday’s “sequester.”
Already, some Republicans held out hope the current struggle might lead to talks on completing work on the final piece of a deficit reduction package that has been more than two agonizing years in the making.
“The objective here ought to be not just to deal with sequester but to deal with the underlying spending problems, which require tax reform” as well as reform of benefit programs like Medicare, Medicaid and Social Security,” said Sen. Rob Portman, R-Ohio.
Though furloughs are a fear for some, especially as many as 13,000 civilian workers at Wright-Patterson Air Force Base and other federal workers, there is little sign of business worry, let alone panic in the nation. Stocks rose Thursday for a third straight day. Two months after the “fiscal cliff” showdown, most people don’t see the new cuts as all that scary — and this time they’re not staring at a tax increase.
On the House side, the only legislative action around what Washington calls “the sequester” was in hearing rooms on Thursday. Rep. Mike Turner, R-Dayton, convened a hearing of the Tactical Air and Land Forces subcommittee of the House Armed Services Committee next to a giant clock ticking down the minutes until the March 1 deadline, noting that it would be the last time the House would take testimony on the impact of the cuts before they kicked in.
Turner himself lamented the impact that the cuts would have on Defense, calling them an “irresponsible and drastic blow to our national security.”
Cuts amount to less than 3% of federal budget
With all the dire warnings from both parties, one might think the federal government is headed for a radical downsizing.
It isn’t.
The automatic cuts amount to less than 3 percent of this year’s $3.55 trillion budget.
But the cuts won’t be spread across the entire budget. Roughly two-thirds of the budget — Social Security, Medicaid, the majority of Medicare, food stamps, welfare checks and interest payments on the national debt — are considered “mandatory” spending and are not subject to sequestration.
That means the cuts will slice through the remaining one-third of the budget, known as “discretionary” spending. Scheduled discretionary spending cuts include an 8 percent reduction in the Pentagon budget and cuts of 5 percent to 6 percent in domestic programs that range from airport and border security to public school assistance to grants for scientific research.
If sequestration runs its full course through 2021, the federal budget will still grow 50 percent larger over the next eight years and the national debt will swell to $21.6 trillion from its current $16.6 trillion, according to the CBO. Compared to the nation’s overall economic output, federal spending and the amount of debt held by the public would be at roughly the same levels in 2021 as they are today, the CBO estimates.
While the overall scale of federal spending and indebtedness won’t change much under sequestration, discretionary spending will be increasingly squeezed — from 34.1 percent of federal spending now to 25.3 percent in 2021, according to CBO estimates that assume the sequester remains in place that entire time.
The biggest factor in crowding out future discretionary spending is interest payments on the national debt. Net interest payments are $224 billion this year, or 6.3 percent of the overall budget. By 2021, CBO estimates that interest payments will balloon to $730 billion — larger than the projected defense budget that year — and consume 13.6 percent of federal spending.
The CBO projections highlight the difficulty of reining in spending when a growing majority of the budget is considered untouchable.
The Associated Press contributed to this report.
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