Tag Archives: sequestration

Sequestration came from the White House

obamaHead

All this week the word sequestration has been bandied about by television news people.  I admit to having to look it up so I thought others might also be questioning what this giant four syllable word really means and what its significance is today.

se·ques·tra·tion

n. the employment of automatic, across-the-board spending cuts in the face of annual budget deficits.

The History of the current debate:

In 2011 when Congress and President Obama could not agree on a budget as they approached a midnight deadline they chose to kick the can down the road.  According to Politifact:  The idea of using sequestration that came out of Obama’s White House.  By using sequestration the federal government could continue running and no one would have to deal with the serious cuts needed to stop the deficit spending until later.  Sequestration included massive cutbacks in Defense. The intention was to force Republicans to negotiate and to not to actually put the cuts into effect. Both Democrats and Republicans agreed to this last minute plan thinking the other side would budge.

Bob Woodward’s forthcoming book on the Obama administration, “The Price of Politics”, lends weight to the Politifact assessment: the White House came up with sequestration as a way to force Republicans into tax increases. In a failed game of chicken, Obama believed that the defense cuts were so ridiculous that the GOP members would give into his tax increases. The divisive tactic proposed by the Administration was favored by neither Reid nor Boehner, but as a compromise, it was accepted by both.

The parties all agreed to have a super-committee as part of the law which included the budget threat that if they could not agree on a budget or if Congress voted it down then automatic across the board cuts would go in to effect.

Unfortunately, the super-committee didn’t agree on a deficit reduction package, so Congress never voted on it. Sequestration is now set to take effect with the 2013 budget.

Fast forward to the third presidential debate:

Politifact Romney: “I will not cut our military budget by a trillion dollars, which is a combination of the budget cuts the president has, as well as the sequestration cuts. That, in my view, is making … our future less certain and less secure.”

Obama responded by saying Romney was assigning blame in the wrong place.

“First of all, the sequester is not something that I’ve proposed. It is something that Congress has proposed. It will not happen,” Obama said. “The budget that we are talking about is not reducing our military spending. It is maintaining it.”


Well that’s something. We already saw that the sequestration idea came from the Obama administration. The president must have forgot.

On which side of sequestration does the president fall?

Did the president really mean he was going to not let sequestration happen on his watch?

Almost as soon as the debate was finished the White House was backing down the idea that this president could pick and choose which parts of the laws he would enforce.  Did the president have a slip of the tongue and give away his bargaining card? Was the president reaching out to the handful of military voters who still approved of him? Or was he just stating something that might appeal to a few voters but did not mean in the least.

For this last question we look a the Des Moines Register Interview with President Obama October 24, 2012. This interview was first asked to be off record until the Register staff made the request public. Yesterday the White House recanted giving the Register the ability to post a transcript. You can read the full transcript at the paper’s website above.

Forward into the interview about 15 minutes: The president has been asked how he will make necessary budget cuts to reach a balanced budget.

THE PRESIDENT: Well, Rick, let me answer you short term and long term. In the short term, the good news is that there’s going to be a forcing mechanism to deal with what is the central ideological argument in Washington right now, and that is: How much government do we have and how do we pay for it?

So when you combine the Bush tax cuts expiring, the sequester in place, the commitment of both myself and my opponent — at least Governor Romney claims that he wants to reduce the deficit — but we’re going to be in a position where I believe in the first six months we are going to solve that big piece of business.

It will probably be messy. It won’t be pleasant. But I am absolutely confident that we can get what is the equivalent of the grand bargain that essentially I’ve been offering to the Republicans for a very long time, which is $2.50 worth of cuts for every dollar in spending, and work to reduce the costs of our health care programs.

Finally.

As a popular news station says, “we report, you decide.” But the facts are clear:

  • Sequestration is used when Congress and the White House cannot work together in order to let someone else deal with the problems.
  • President Obama or his administration introduced the idea of sequester to the budget talks in 2011.
  • The president does not have independent authorization to not put sequestration cuts into effect.
  • The president stated that he would use the reductions from sequestration as part of his deficit reduction plan.

And just in case you’re interested.

From the White House:

  • The Deal Includes An Automatic Sequester to Ensure That At Least $1.2 Trillion in Deficit Reduction Is Achieved By 2013 Beyond the Discretionary Caps: The deal includes an automatic sequester on certain spending programs to ensure that—between the Committee and the trigger—we at least put in place an additional $1.2 trillion in deficit reduction by 2013.
  • Consistent With Past Practice, Sequester Would Be Divided Equally Between Defense and Non-Defense Programs and Exempt Social Security, Medicaid, and Low-Income Programs: Consistent with the bipartisan precedents established in the 1980s and 1990s, the sequester would be divided equally between defense and non-defense program, and it would exempt Social Security, Medicaid, unemployment insurance, programs for low-income families, and civilian and military retirement. Likewise, any cuts to Medicare would be capped and limited to the provider side.
  • Sequester Would Provide a Strong Incentive for Both Sides to Come to the Table:  If the fiscal committee took no action, the deal would automatically add nearly $500 billion in defense cuts on top of cuts already made, and, at the same time, it would cut critical programs like infrastructure

The Super Committee Fails – Medicare and Defense to Suffer

Heartache and disappointment were thick throughout twitter, facebook and the comments on articles across the internet on the news that the Congressional “Super Committee” on deficits had failed. In actuality, nothing has actually happened.

Rep. Jeb Hensarling, the Republican co-chair of the committee, penned an account of why the committee failed. In short, the Democrats dismissed the three major Republican ideas out-of-hand, promised to bring back plans of their own and never did.

First, democrats took any and all spending related to President Obama’s health care plan off the table. Then rejected Bill Clinton’s budget director’s plan, then rejected ideas from the bi-partisan Simpson-Bowles commission. After quickly killing all three ideas, two from bi-partisan or Democrat sources, the committee democrats came back with their own plan… er ..  not really.

To put this in perspective, there were exactly 6 democrats and 6 Republicans on the committee. There was one Republican and one democrat co-chair. No one side had more say, more power or more influence than the other.

The Republicans presented three ideas, the Democrats refused them and presented nothing in return.

On to the important part – why should anyone care?

In a word, sequestration – the automatic $1.2 trillion in cuts that will occur in 2013 if Congress doesn’t pick up the ball dropped by the committee. Those cuts will happen “equally” in national defense spending and domestic programs should Congress not be able to find $1.2 trillion in cuts.

The CBO estimates that the cuts will take almost 10% from the defense budget and would cut Medicare by up to 2% of the program’s costs.

The Medicare cuts should be alarming to anyone on the federal medical program. 100% of the cuts come in the form of cuts on the amount paid to providers. If providers are paid less, we’ll see them opt out of the program and seniors will have fewer choices of where to get care. Medicare is expected to lose about $125 billion in funding from 2013 to 2021.

The toll on America’s ability to defend itself will likely be impaired as well. Just under $500 billion in cuts are expected to have to be swallowed by the nation’s military. Rep. Buck McKeon (R-CA), House Armed Services committee chariman, said that he will be proposing a bill to head-off the sequestration cuts to defense spending. Rep McKeon said that his legislation is necessary because the cuts would cause “catastrophic damage to our men and women in uniform.”

President Obama’s response was to continue the Democrat strategy – just say no to anything the Republicans propose. On Monday evening, the President noted that “Already some in Congress are trying to undo these automatic spending cuts, my message to them is simple: No.”  The president continued by threatening to veto any measure to hold back the cuts to Medicare or the country’s armed services.

Unfortunately, with or without the sequester the end is the same – out-of-control spending. Veronique de Rugy of Mercatus Center wrote:

Changes in spending from sequestration result in new budget projections below the CBO’s baseline projection of spending based on current law. The federal government would spend $3.62 trillion in the first year with sequestration versus the $3.69 trillion projected by CBO. By 2021, the government would spend $5.26 trillion versus the $5.41 trillion projected. Overall, without a sequester, federal spending would increase $1.7 trillion over those ten years (blue line). With a sequester, federal spending would increase over ten years by $1.6 trillion (red line).

Despite the stonewalling from Democrats, some polls show that a slight majority of Americans will blame Republicans for the failure of the 50/50 split bi-partisan committee despite most Americans opposing sequestration.

The super committee was a failed idea with a designed end. Democrats knew all along that they weren’t going to do anything. They couldn’t even bring themselves to propose a single plan. Now that the extra-legislative body has failed, what is the next step?

Since the cuts don’t take effect until 2013, the only course of action left for Conservatives who wish to see discipline returned to the budget process is to win the Senate and White House in 2012. At that point, a responsible budget can be put in place and the sequestration can be done away with.

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