GOP lawmakers see automatic cuts as leverage

Published on NewsOK Modified: January 30, 2013 at 6:24 pm •  Published: January 30, 2013
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WASHINGTON (AP) — There's a growing sense of resignation that the country's political leaders will be unable or unwilling to find a way around looming automatic spending cuts despite fresh signs the cuts would threaten the recovering economy.

On one side are conservative Republicans, outnumbered and frustrated, who see the painfully large cuts as leverage in their battle to force Democrats into concessions on the budget. On the other side are President Barack Obama and his Democratic allies, who are pressing to replace some of the cuts with new tax revenues.

The predictable deadlock — and looming cuts of $85 billion this budget year alone — has the potential to slam the economy, produce sweeping furloughs and layoffs at federal agencies and threatens hundreds of thousands of private sector jobs.

The cuts would shrink the Pentagon budget by 7 percent and force most domestic agencies to absorb a 5 percent cut concentrated in the last half of the budget year.

Just last year, GOP leaders were among the loudest voices warning of dire consequences for the military and the economy if more than $100 billion in cuts across the board went into effect. Now, even as defense hawks fume, Republicans see the strategy as their best chance of wringing cuts from costly government benefit programs like Medicare that Obama and his Democratic allies in Congress have been reluctant to touch.

The move is fraught with risk. Some $43 billion would be cut from the Pentagon budget between March and October if battling Democrats and Republicans can't agree on an alternative. Equal cuts would hit domestic programs, although the health care programs that are major drivers of future deficits are largely exempt.

"Talk about letting the sequester kick in, as though that were an acceptable thing, belies where Republicans were on this issue not that long ago," White House Press Secretary Jay Carney said Wednesday. "This is sort of political brinksmanship of the kind that results in one primary victim, and that's American taxpayers — the American middle class."

The automatic cuts, known as a "sequester" in Washington-speak, are the penalty for the failures of the 2011 deficit "supercommittee" and subsequent rounds of budget talks to produce an agreement.

Along with the threatened expiration of Bush-era tax cuts, the spending cuts were a major element of the so-called fiscal cliff crisis that gripped the country at the new year. While most of the tax cuts — except for upper-bracket income — were made permanent, negotiators could only agree on a two-month reprieve to the sequester after finding $24 billion in replacement money that reduced this year's round of cuts from $109 billion to $85 billion. Eight more years of cuts, totaling almost $1 trillion, still remain.

The austerity, economists say, would slow down the economy. Under a formula by the Congressional Budget Office, a $43 billion cut in defense spending could cost 300,000 jobs this year.

"In terms of the political dynamic here, defense spending is only 20 percent of the federal budget, but it's taking 50 percent of the cuts, which means it's going to be hitting the Republicans a lot harder than the Democrats," said defense analyst Loren Thompson of the Lexington Institute think tank.

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