Author Topic: Saving the Sequester  (Read 350 times)

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Offline sinkspur

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Saving the Sequester
« on: September 26, 2013, 11:17:43 AM »

Saving the Sequester

While the defund distraction plays on, Congress tries to gut the spending caps.

   One cost of the media circus around Ted Cruz is that almost no one is following the classic Washington misdirection play over the automatic sequester spending cuts. While right and left are preoccupied with their hero or bugbear, the politicians are attempting to break the spending caps.

The exceptions are Republican Senators Tom Coburn of Oklahoma and Jeff Flake of Arizona, a pair of genuine fiscal conservatives who are sounding the alarm on this fiscal jail break. House Speaker John Boehner and Senate Minority Leader Mitch McConnell had better pay attention or the hard-fought budget victories of 2011 will vanish in this year's fiscal showdown.

Readers may have forgotten about the sequester since President Obama predicted hellfire and national damnation when it started to take effect earlier this year. In 2011, Mr. Obama proposed and Republicans agreed to 10 years of caps on discretionary spending (not including entitlements like Social Security) as part of the debt-ceiling deal, which created the Budget Control Act.

Mr. Obama proposed the automatic cuts only because he thought Republicans would never be able to live with them, and he now regrets it. The horrors the President predicted never did take place as government agencies found ways to save the roughly 5% in 2013 without hitting essential services. But the cuts have been effective at accomplishing one of the GOP's (and the Tea Party's) stated goals: cutting the economic burden of government spending.

Total federal outlays are down from a high of $3.6 trillion in fiscal 2011 to an estimated $3.45 trillion in the 2013 fiscal year that ends on September 30. Assuming no recession and adherence to the caps, federal expenditures will keep shrinking as a share of the economy over the rest of the Obama Presidency. Federal discretionary spending hasn't declined for two consecutive years since the Truman Administration.

The spending cap for 2014 is pegged at $967 billion. Republicans in the House—at the behest of defense hawks—have already made the mistake of raising that number to $986 billion in the continuing resolution budget bill that the House passed last week. The House earmarks all of that extra $19 billion for defense, as it should, but Senate Democrats will shift most of that to domestic spending.

House conservatives were so busy patting themselves on the back for adding the ObamaCare provision that they failed to notice the higher spending level. Or maybe they didn't care. One of the "defund" ringleaders in the House is Georgia's Tom Graves, who is now in favor of the extra $19 billion. It's no accident he's on the Appropriations Committee that decides where the spending goes.

Meanwhile, as the ObamaCare histrionics continue in the Senate, Majority Leader Harry Reid wants to raise the caps for 2014 by as much as another $70 billion to closer to $1.058 trillion in discretionary spending. That was the spending marker that Democrats put down earlier this year in their 2014 budget resolution (which was never reconciled with the House). By focusing so much on the futile effort not to fund ObamaCare, Republicans may let Democrats gut their single biggest fiscal achievement since 2010.

Conservative activists outside of Congress would normally be blowing the whistle on this. But the folks at Heritage Action and the Tea Party Patriots are focusing on the political theater of defunding ObamaCare while downplaying the political reality of what the government actually spends. These are the very folks who are accusing Republicans for being spineless for not joining the defund chorus that has little or no chance of succeeding while President Obama occupies the White House.

What they're forgetting is that the sequester is the best political leverage Republicans have to gain a concession from Democrats—on ObamaCare or anything else. The ever-tighter spending caps on domestic discretionary spending are squeezing the liberal constituencies that live off government. As the likes of Planned Parenthood and welfare and other transfer payments get squeezed, the political pressure increases on Democrats to give up something tangible in return for easing the caps.

The shrewder Republicans understand this, which is why they've been hoping to use the sequester as part of the negotiation over the federal debt limit that will hit next month. An offer to ease the sequester has a far better chance to win entitlement reforms worth the name, perhaps including a delay in some or all of ObamaCare, than does a government shutdown that Mr. Obama would welcome so he can blame Republicans one more time.

The "defund" drama is Beltway kabuki that is distracting from the real fiscal choices that will be made in the coming weeks. What a shame it would be if by focusing so much on the health-care defunding they can't accomplish in the budget fight, Republicans gave up the sequester spending caps that are their best hope for delaying part or all of ObamaCare.
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