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Save the Sequester

November 27, 2013 in Economics

By Michael D. Tanner

Michael D. Tanner

Don’t look now, but we are just 16 days away from the December 13 deadline for House and Senate budget negotiators to reach an agreement on a 2014 budget and avoid another potential government shutdown.

Okay, December 13 is less a deadline than a suggestion. The current continuing resolution (CR), the product of October’s government shutdown, doesn’t actually expire until January 15, giving Congress an additional month to come to an agreement. But the December 13 date is still important, because the House is scheduled to recess from the 13th until January 7, with the Senate getting back one day earlier, leaving little time for the expected last-minute maneuvering.

So far, the negotiations appear to be dominated by what won’t be considered. House Budget Committee chairman Paul Ryan had suggested a willingness to trade some loosening of the sequester’s short-term spending caps in exchange for long-term entitlement reforms. But Senate Majority Leader Harry Reid rejected that idea out of hand, calling it “a stupid trade.” Reid says he is not interested in taking up Medicare reform at this time, and he claims there is no need for Social Security reform. “The program is not about to go broke,” Reid says, “so take it easy on Social Security.”

Republicans, of course, are not willing to accept additional tax increases on top of the $620 billion included in last December’s fiscal-cliff deal and the more than $1 trillion included in Obamacare over the next ten years, although rumors persist that the GOP may accept some other revenue increases, such as a hike in airport security fees. More disappointingly, House Speaker John Boehner has reportedly rejected any cuts in agricultural subsidies as part of any budget deal.

In the absence of a larger agreement, House Republicans may push for another short-term CR, funding the government probably through April 15. If that CR holds spending to levels agreed to under the sequester, that would be a small but valuable step forward, reducing government discretionary spending by $21 billion from the funding level in 2013. Nondefense discretionary spending would remain largely untouched, and could actually increase slightly, from $468 billion to $469 billion, while defense spending would be cut from $518 billion to $498 billion, roughly the level of defense spending in 2008, not including spending for overseas operations such as the wars in Iraq and Afghanistan.

But as December 13 gets closer, expect to hear howls of anguish — and …read more

Source: OP-EDS

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