It’s Washington’s latest case of economic hostage-taking: If Congress and President Barack Obama don’t reach a deal by Friday, the budget gets whacked!
Voters have heard these fiscal threats before. This time, the cuts are part of existing law. Inaction means nearly across-the-board spending cuts, with half taken from the defense and the military.
Here’s PolitiFact’s guide to that funny word, sequestration.
Whose fault is it?
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Both the White House and Congress signed off on an agreement leading to the sequester.
Here’s the background: In the summer of 2011, Obama and Congress were in a high-stakes standoff over the debt limit. House Republicans insisted on spending cuts before increasing the debt limit. This was a notable change from the past, when members of Congress would pass debt ceiling increases with relatively little fuss.
Obama and House Speaker John Boehner tried unsuccessfully to reach a “grand bargain” to put the federal budget on more stable footing. When that failed, they arrived at the much less ambitious Budget Control Act of 2011.
That law included about $1.2 trillion in future budget cuts, but it also directed Congress to find another $1.2 trillion via a bipartisan “supercommittee.” As further incentive, the law had a threat: If the supercommittee couldn’t agree on a package, or if Congress voted down the supercomittee’s proposal, a sequester would automatically go into effect.
Both Obama and Boehner supported the plan and urged Congress to pass it, which it did. The supercommittee deadlocked, though, so it never proposed new cuts. Hence the sequester.
Whose idea was it?
It was Obama’s idea, but Republicans agreed to it and provided key support.
The most detailed account on this point is in The Price of Politics, a Bob Woodward book about the 2011 debt ceiling standoff. His reporting shows the White House developed the idea and presented it to Democratic leadership on July 28 and to Boehner’s team two days later.
Both sides saw it as a way to force further negotiations later, according to Woodward. The Obama team thought there was “no chance” Republicans would allow defense cuts to happen, while Boehner said Democrats would cave to save domestic programs. Woodward quotes Boehner predicting the sequester “is never going to happen.”
Who wants it to happen?
The prevailing opinion in both parties is sequestration = bad.
What we’re witnessing now is a game of brinksmanship: Obama has proposed a plan to avert the cuts that combines closing tax loopholes with cutting federal spending; Republicans have offered spending cuts.
“They are putting forward proposals that they know the other side is going to reject,” said Steve Ellis, vice president of Taxpayers for Common Sense. “It’s like they’re holding out for total victory.”
That’s the outward account, anyway. Norman Ornstein, a scholar at the conservative American Enterprise Institute, says there’s a second, behind-the-scenes storyline:
“A sizable number of members of Congress want a sequester; the overwhelming majority of them are House Republicans who believe that this is the best way to get a down payment on spending cuts, and don’t believe (or care) that national security might be at risk,” Ornstein said. “Very few Democrats want a sequester; a few think it will backfire on Republicans, and so are secretly happy.”
It’s the blunt, indiscriminate nature of sequestration that policymakers dislike. But at least among Republicans, there’s appetite for belt-tightening.
“This year’s cuts are less than 1 percent of the $8.7 trillion in new debt that will be racked up over the next decade,” said Alison Fraser, with the conservative Heritage Foundation. “So absolutely, sequester level cuts are necessary.”
What if it happens?
Across-the-board cuts in discretionary domestic spending sounds pretty nebulous. But think about these federal programs and agencies: the Centers for Disease Control and Prevention, border security, airport security, Head Start and FEMA’s disaster relief budget. Now think about them (and others) having billions less to perform their functions, and the picture becomes a little clearer.
Sharon Parrott, a vice president at the left-leaning Center on Budget and Policy Priorities, said the cuts will remind the public of “some of the really basic things that government does.” One example: meat inspectors, who could be furloughed.
Most people don’t think about their role as they stroll through the grocery aisles, she said.
But she emphasized that some people could feel the impacts directly. Head Start, which awards grants to states for school readiness, would see cuts. Health programs that provide immunizations and cancer screenings are also vulnerable.
Keep in mind that many government services were exempted from the sequester. Tax returns will still go out. Seniors won’t lose Medicare benefits. Veterans benefits won’t be affected.
For Americans worried about a cataclysm?
“It’s not going to be hellfire and brimstone,” Ellis said.