Mark Schoeff Jr.: The sequester firing line
Thursday, February 28, 2013 6:10 AM
WASHINGTON – When $85 billion worth of automatic spending cuts begin to take effect on Friday, the Crane Naval Surface Warfare Center in southern Indiana will be in the firing line.
The base will take a $36-million hit to its budget between now and Sept. 30, when the first round of the so-called sequester concludes, according to Democratic Sen. Joe Donnelly. It’s part of the down payment on $1.2 trillion in cuts over 10 years that Congress agreed to in 2011 to raise the debt limit.
Donnelly told reporters in a conference call on Wednesday that taking a whack at Crane, as well as other across-the-board sequester cuts, is a bad way to reduce the federal deficit.
“I have been hopeful we can reach a thoughtful, smarter way to cut; that we can include revenues as well,” Donnelly said.
The gulf between Republicans and Democrats over the sequester is illustrated by the stance taken by the GOP lawmaker whose district lies next door to Crane.
“Of course I’m concerned about defense cuts,” Rep. Todd Young, R-9th CD, said in a recent HPI interview. “But I’m also concerned about my children and grandchildren.”’
Taking care of the next two generations requires that the country make substantial progress in reducing annual deficits that have topped $1 trillion for the last several years and a debt that totals about $16.4 trillion, according to Young.
“The president and Senate Democrats seem disinclined to deal with what is driving our nation’s deficit,” Young said. “We don’t have a revenue problem, we have a spending problem.”
Young and other Republicans say that Obama got the tax increases on the wealthy that he was seeking in the New Year’s Day legislation that averted hundreds of billions of dollars of automatic tax hikes and spending cuts known as the fiscal cliff.
That’s where Young and Donnelly diverge. Donnelly supports a Senate bill that likely will be voted down that would replace the sequester with a mix of tax increases and spending cuts. On the revenue side is the so-called Buffett Rule, which would ensure that people earning more than $1 million annually pay at least a 30 percent tax rate.
Donnelly said that federal revenues are running at about 16 percent of the economy, while spending is at 23 percent. Spending needs to come down, but revenues also need to increase.
“We’re still shy on that [revenue] number,” Donnelly said. “I hope people realize that.”
That’s the interesting question. Where will the American people come down on how to tackle the budget? Over the next several weeks, we’ll have a chance to see the debate evolve in real time.
This is not one of those issues that requires waiting until the next election to sort out. As March 1 dawns, the voters seem split on the efficacy of the sequester.
But it may be difficult for Americans to make up their minds because much of the sequester won’t be felt until weeks or months down the road – and even then only in certain areas of the country.
That means that Republicans and Democrats likely will enter the next budget battle – over a March 27 deadline for shutting down the government – without much evidence of who is winning.
The situation creates an opening for bold thinking about the budget in general and, specifically, reform of social insurance programs, such as Medicare. If Republicans truly want to find out how their cut-the-deficit stance is working, they should call Obama’s bluff -- offer a big package of structural spending reforms, and see how he reacts.
At the moment, Obama continues to ride a popularity wave that has him above 50 percent in job approval. It will be hard for Republicans to win the spending debate just by asserting that Obama has ignored that side of the equation. They have to put something creative on the table that forces him and Democrats to walk away, if they want to establish bright lines between the parties on spending.
The other outcome is that such a move forces Democrats to come up with a counter offer that goes beyond trimming around the edges of deficit reduction. They might engage with some of their own big ideas or come up with a way to make revenue increases more palatable to Republicans.
Ultimately, the best politics is for the sides to come together to cure the nation’s fiscal ills. If they can’t do it in March of an off-year, they never will.
In perhaps a faint sign of such movement, Donnelly said that he is part of a group of 25 senators that has been meeting to come up with a sequester alternative. They are gathering “just as Americans, not Democrats or Republicans.”
“Everybody agrees that there has to be a better way to do this,” Donnelly said.
Schoeff is HPI’s Washington correspondent.