Two weeks from a sequester that will cut tens of billions from the Pentagon budget this year, lawmakers are still not in agreement on an alternative that will avoid the automatic cuts.
Both parties have agreed that it is best to avert the across-the-board $85 billion in spending cuts for this year, set to begin March 1.
Senate Democrats have proposed a $110 billion package that includes a mix of spending cuts and tax increases for temporarily offsetting the sequester. That plan would end some agricultural subsidies, returning an estimated $27 billion in savings, and cut defense spending by a similar amount over nearly a decade.
However, Republicans aren’t convinced that reaping more revenues through a tax hike is the best way to teach Washington a lesson about spending.
The Democrats’ plan is expected to bring in some $54 billion in revenue by taxing incomes of $1 million or above at a rate of at least 30 percent. The plan would also include closing loopholes for oil companies, but not even a whisper of changes to entitlement programs; Senate Minority Leader Mitch McConnell has already dismissed the Democrats’ approach as “a total waste of time.”
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Whether Republicans like it or not, they will eventually have to get on board, according to Sen. Chuck Schumer, D-N.Y.
“I think that Democrats have the high ground, both substantively and politically, and we will win on this issue,” Schumer said on CNN’s “State of the Union.”
Arguing that 750,000 jobs will be lost and the economy will shrink by 6 percent if there is inaction, Schumer said the Republicans “have no choice.”
“Whether it’s right on the eve of sequestration or if God forbid it has to take effect for a few days, the devastating effects will be so strong,” he continued. “The president will be out there on his bully pulpit that just like on the fiscal cliff Republicans will come on board. They have no choice. Their arguments are untenable and don’t meet the favor of hardly anyone other than themselves and the few whose special interests they are protecting.”
On the same program, Wyoming Republican Sen. John Barrasso said “these spending cuts are going to go through on March 1st” because “taxes are off the table.”
Firing back that Republicans won’t trade spending cuts for a tax increases, Barrasso said there are better ways for dealing with the budget cuts and that he is open to talks about that.
Experts say Republicans have little incentive to stop sequestration. The GOP already lost on the issue of taxes during the fiscal cliff showdown last December, when lawmakers approved a higher 39.6 percent tax rate for couples making $450,000 a year and individuals with income above $400,000, despite Republican opposition to any increase. Now that spending cuts are on the table, Republicans may choose to stand firm and push for one of their tenets, reining in Washington’s spending.
“The Republicans have less incentive to stop this,” said Julian Zelizer, a professor of history and public affairs at Princeton University.
But whether the GOP will cave and adopt the Democrats’ plan is anybody’s guess. Zelizer said both parties could let sequestration happen – even if for a short while.
Democrats, according to Zelizer, are trying to figure a way out of the ongoing budget battle, and may bet that Republicans will suffer a backlash like they did in the mid-1990s, when President Bill Clinton and House Speaker Newt Gingrich couldn’t agree on a budget and the federal government shut down for 21 days. That 1995 shutdown was followed by a resounding Democratic victory in 1996.
“They will say, ‘Let the public see what deficit reduction is,’” Zelizer said. That could change the debate.
For Republicans, it's a gamble. They could take the brunt of the blame if the 5 percent cut to domestic programs and 8 percent to the Pentagon takes effect.
Defense Secretary Leon Panetta and military leaders have warned that cuts to the Pentagon will affect military readiness. If the cuts happen, Panetta has said the Pentagon would have to sacrifice ship and aircraft maintenance. The Pentagon is already slashing nearly $500 billion from its budget over the next decade.
“If I face another half a trillion in cuts, then all bets are off,” Panetta told soldiers overseas last month. “I don’t know what the hell to tell you. We’re all going to pay a hell of a price.”
Republicans are playing a “dangerous political game,” Zelizer said.
Stony Brook University Political Science Professor Albert Cover believes the sequester will kick in before the rhetoric changes. And when it does, Cover expects complaints from the Joint Chiefs of Staff about readiness and those from domestic constituents to speak volumes.
Then, lawmakers will be forced to go back to the drawing board and agree on a plan.
“I would be surprised if this was the final episode on the sequester,” he said. “It will at least begin, but at some point it will be preempted by some sort of solution they will come up with.”
And when the pressure is on, Cover said Congressional leaders will begin to find specific cuts instead of broad ones. He added that the so-called “balanced approach” President Barack Obama is seeking may or may not be in the same package.
“I expect in the next couple of months to see some targeted cuts and loophole closing to preempt the rest of the sequester,” Cover said. “It’s hard to see now an alternative to its coming into effect.”
Cover thinks Republicans will take most of the heat, even though the idea of defense sequestration originated with the White House, as a means to force the GOP to negotiate.
“They are not doing too well in terms of their popularity,” he said.
And according to Zelizer, things might turn sour for Republicans even in terms of policy objectives, not just popularity.
“If the cuts go through it is going to have the opposite effect of what Republicans wanted,” he said. “Congress is going to focus on where to spend.”