Republican congressional leaders are backing away from a trigger system of forced spending cuts that they hailed 13 months ago as a herald of fiscal discipline and for which GOP lawmakers voted by large margins.
With the forced cuts – called sequestration on Capitol Hill – slated by law to take effect Jan. 2 and no deal in sight to replace them, the Republicans say the reductions could harm the military and they’re blaming President Barack Obama.
Obama, in turn, is accusing the Republicans of flip-flopping by rejecting strong budget controls they once championed.
The $1.2 trillion in forced cuts, part of an August 2011 law to raise the debt ceiling by the same amount, would be split roughly in half between defense and non-defense programs over nine years.
In a move to deflect the GOP attacks, Obama last week exempted military personnel from the $54 billion in possible defense cuts next year as he released a congressionally mandated report on how he’d implement the forced cuts.
“This report confirms that the president’s ‘sequester’ is a serious threat to our national security and must be replaced,” House Speaker John Boehner responded.
The Ohio Republican’s stance was at odds with his celebratory pose after Obama signed the 2011 Budget Control Act on Aug. 2, 2011, which contained $1 trillion in defense cuts over a decade and threatened hundreds of billions more through forced reductions.
“I got 98 percent of what I wanted,” Boehner said then. “I’m pretty happy.”
Other GOP leaders also praised the deal at the time and have done recent about-faces. Among them is Rep. Paul Ryan, R-Wis., the House Budget Committee chairman, who’s now Republican presidential candidate Mitt Romney’s running mate.
Boehner now says he never supported the forced cuts alone but only as part of a broad package of budget controls that tied the debt-ceiling hike to offsetting reductions. The sequester wasn’t meant to take effect, Boehner adds, but was intended instead to goad Congress and Obama into reaching a bipartisan accord that would replace the $1.2 trillion in deficit reduction with a different path to the fiscal target.
Boehner notes that the GOP-controlled House of Representatives in May passed the Sequester Replacement Reconciliation Act, a bill to replace the $1.2 trillion in forced cuts with a different mix of spending reductions.
But that measure, which passed along party lines and died in the Democratic-controlled Senate, contained a separate provision to extend the Bush-era tax cuts to all Americans when they expire Dec. 31 – a “poison pill” clause for Obama, who wants to limit them to household incomes under $250,000 a year.
Ryan says he voted for the sequester as part of the larger deal to raise the debt ceiling in the spirit of compromise with Obama and his Democratic congressional allies, but never intended the forced cuts to take effect.
“I worked with President Obama to find common ground to get a down payment on deficit reduction,” Ryan said earlier this month. “It wasn’t a big down payment, but it was a step in the right direction.”
House Minority Leader Nancy Pelosi, who also voted in favor of the plan a year ago, accused Boehner last week of not allowing lawmakers to vote on a Democratic proposal to replace it.
“It is a better plan,” the California Democrat said. “It actually does end sequestration through a mix of cuts and revenues. The reason we have a problem here is because our Republican colleagues have refused to have one red cent from the wealthiest people in our country contribute to resolving this fiscal crisis.”
That Democratic plan had its own poison pill for Republicans: bringing in more federal revenues by ending the Bush tax cuts for those with household incomes of $250,000 or more.
The House passed the budget accord in August of last year by 269-161, with 174 Republicans voting for it and 66 opposing it. The Senate’s 74-26 vote included 28 Republicans in favor and 19 opposed.
The budget deal split House Democrats in half, as 95 voted for it and 95 voted against it. In the Senate, 45 Democrats backed the bill while six opposed it.
One independent senator voted for the accord, and one voted against it.
The budget law set up a “super committee” tasked with finding ways to reduce the cumulative deficit by $1.2 trillion. That panel failed to reach agreement last November, however, leaving the forced cuts in place to start Jan. 2, 2013.
Coloring the dispute is the presidential election, now less than seven weeks away.
Obama hopes that a second term will give him increased clout to shape a new deficit-reduction package more to his liking, with “revenues” – to include tax hikes on the wealthy – as part of the mix.
Republicans are banking that an Obama defeat by Romney, coupled with their party regaining control of the Senate, will put them in a position to dictate the terms of future spending cuts, focused heavily on non-defense domestic discretionary programs.
The upshot is that the two sides probably will wait until a “lame duck” session of Congress after the November elections – so-called because some lawmakers will be retired or voted from office as of January – to try to replace the looming cuts with a different mix of spending reductions.
The post-election legislative session also must decide whether to let the Bush-era tax cuts expire Dec. 31 as scheduled, to extend them for all Americans as Romney wants or to adopt Obama’s plan of limiting them to households with income under $250,000.
The two controversies are linked because broader tax reductions would decrease revenues to the federal government, making it harder to reduce future deficits.
Romney, a former Massachusetts governor, has ruled out including military cuts in deficit reduction. He instead wants large hikes in defense spending. The Pentagon’s budget has doubled over the past decade, fueled by the Iraq and Afghanistan wars and broader initiatives to fight terrorism.
Romney and Ryan are campaigning against decreases in defense funding in Virginia, North Carolina and other battleground states with large military bases.
In eight key election states, the Romney campaign is running TV ads that say: “Romney’s plan? Reverse Obama defense cuts.”
Steve Ellis, chief budget analyst for the nonpartisan anti-spending group Taxpayers for Common Sense in Washington, said the defense cuts that Romney and his GOP congressional allies were targeting weren’t reductions in absolute spending.
Instead, Ellis said, they are smaller increases than those projected from the Pentagon’s current “baseline” levels, which are inflated thanks to unsustainable 9 percent annual post-9/11 hikes.
“Even if we did the cuts proscribed in sequestration, we would end up with about the same level of defense spending as we had in 2006,” he said.
Since then, virtually all U.S. troops have left Iraq, and 23,000 have exited Afghanistan under Obama’s 2014 withdrawal plan.
“Gov. Romney’s suggesting that we increase defense spending really ignores some of the big budget challenges facing us and growth that’s happened in our defense sector,” Ellis said. “Clearly, there’s room to cut. We need to spend money smarter instead of spending more.”