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Analysis: Neither side blinks in federal budget standoff

Published: Sunday, Feb. 24, 2013 9:00 a.m. CDT

WASHINGTON — The nation’s budget solution was never supposed to look like this: Congress and the White House staring at across-the-board spending cuts that will begin slashing indiscriminately through the federal government in a matter of days.

Each side had expected cooler heads to prevail, assuming the other would set aside its political preferences and compromise to prevent the economic problems that are widely expected from a sudden reduction in the flow of federal funds.

House Speaker John A. Boehner, R-Ohio, believed that President Barack Obama was so fearful of deep reductions to domestic programs that the White House would yield to Republican demands. Instead, Obama has stuck to his insistence that wealthier Americans and corporations must contribute more in taxes as part of any solution to the country’s long-term debt problems.

The White House figured Republicans would be the ones to blink. The party’s opposition to defense cuts would force Boehner and Senate Republican leader Mitch McConnell of Kentucky to yield and accept at least some additional taxes rather than go ahead with the automatic cuts, known as a sequester, Democrats believed.

Both sides severely miscalculated.

Now the cuts that both sides said would never happen are only days away. With some of the largest government programs, including Medicaid and Social Security, fully walled off from the cuts, and Medicare only partially exposed, the reductions in other federal accounts work out to about 13 percent for defense and 9 percent for domestic spending for the rest of this year, according to the government’s Office of Management and Budget.

At first, the public likely will not notice huge changes. Many furlough notices for federal workers take at least 30 days to kick in, for example, and the effect on other programs will vary in timing.

Longer waits at airports likely will be seen relatively quickly as the Transportation Security Agency reduces its spending, but cuts in federal education aid may not lead to teachers losing their jobs until the new school year starts in the fall, administration officials have said.

Economists, though, have warned that pulling some $85 billion in federal spending from the economy this year likely will shave economic growth enough to cost about 750,000 jobs.

As the two sides jockey for political advantage, both will be watching to see how the public reacts to the cuts. A Pew Research Center poll released Friday showed that although the public supports the idea of deficit reduction in general, Americans oppose most suggestions for cutting specific government programs.

Because the effects will unspool over time, this latest budget showdown may last longer than those of the past.

Once the cuts take effect March 1, the next deadline facing Congress is not until March 27, when lawmakers will need to reach agreement on funding the routine operations of the government or risk a full shutdown. In the meantime, the cuts will work their way through the federal system.

“What you’re seeing on a broader level is inertia working in favor of spending reductions — for a change,” said Rep. Mick Mulvaney of South Carolina, a tea party-aligned Republican. “We’re fighting on our playing field.”

This week, the Senate will likely consider two proposals for temporarily averting the cuts — one offered by Democrats and backed by the White House, the other offered by Republican Sen. Kelly Ayotte of New Hampshire and designed to preserve defense spending. Partisan loyalty will likely prevent either from reaching the needed 60 votes.

Polls last week showed that significant majorities of Americans already were inclined to blame the GOP and disagree with their cuts-only approach to balancing the budget. In the Pew survey, for example, 79 percent of Americans said that further tax increases should be at least part of the long-term budget solution.

White House officials don’t think their sharp rhetoric will cost them much goodwill on Capitol Hill. Even if they could negotiate a compromise with Republican leaders, they believe, Boehner would be unable to sell it to the party’s members in the House.

Rep. Tom Cole, R-Okla., a veteran party strategist, acknowledged the “very challenging” message his party is trying to deliver in the face of a determined White House and his party’s low approval ratings.

“It’s not going to be particularly comfortable, but I think it’s something Republicans are pretty insistent on,” he said. “The president and his political team think they can intimidate Republicans — it’s not going to happen.”

Democrats believe they have the upper hand because the cuts will be increasingly unpopular.

“The reality is going to hit at some point, and the reality is going to be, there are very deep and immediate cuts,” said Rep. Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee. Republicans, he predicts, will find themselves in an untenable position. “The choice is very simple: whether they’d rather protect special-interest tax loopholes or national security and jobs.”

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