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Neither side blinks in federal budget standoff

Across-the-board spending cuts are set to take effect in a matter of days, as the White House and Republican lawmakers refuse to change position.

February 23, 2013|By Lisa Mascaro, Washington Bureau
  • Transportation Security Administration reductions are expected to produce longer airport lines, possibly one of the most immediately visible effects of upcoming federal budget cuts.
Transportation Security Administration reductions are expected to produce… (Chris Sweda, Chicago Tribune )

WASHINGTON — The nation's budget solution was never supposed to look like this: Congress and the White House staring at across-the-board spending cuts that will begin slashing indiscriminately through the federal government in a matter of days.

Each side had expected cooler heads to prevail, assuming the other would set aside its political preferences and compromise to prevent the economic problems that are widely expected from a sudden reduction in the flow of federal funds.

House Speaker John A. Boehner (R-Ohio) believed that President Obama was so fearful of deep reductions to domestic programs that the White House would yield to Republican demands. Instead, Obama has stuck to his insistence that wealthier Americans and corporations must contribute more in taxes as part of any solution to the country's long-term debt problems.

The White House figured Republicans would be the ones to blink. The party's opposition to defense cuts would force Boehner and Senate Republican leader Mitch McConnell of Kentucky to yield and accept at least some additional taxes rather than go ahead with the automatic cuts, known as a sequester, Democrats believed.

Both sides severely miscalculated.

Now the cuts that both said would never happen are only days away. With some of the largest government programs, including Medicaid and Social Security, fully walled off from the cuts, and Medicare only partially exposed, the reductions in other federal accounts work out to about 13% for defense and 9% for domestic spending for the rest of this year, according to the government's Office of Management and Budget.

At first, the public likely will not notice huge changes. Many furlough notices for federal workers take at least 30 days to kick in, for example, and the effect on other programs will vary in timing.

Longer waits at airports likely will be seen relatively quickly as the Transportation Security Administration reduces its spending, but cuts in federal education aid may not lead to teachers losing their jobs until the new school year starts in the fall, administration officials have said.

Economists, though, have warned that pulling some $85 billion in federal spending from the economy this year likely will shave economic growth enough to cost about 750,000 jobs.

As the two sides jockey for political advantage, both will be watching to see how the public reacts to the cuts. A Pew Research Center poll released Friday showed that although the public supports the idea of deficit reduction in general, Americans oppose most suggestions for cutting specific government programs.

Because the effects will unspool over time, this latest budget showdown may last longer than those of the past.

Once the cuts take effect March 1, the next deadline facing Congress is not until March 27, when lawmakers will need to reach agreement on funding the routine operations of the government or risk a full shutdown. In the meantime, the cuts will work their way through the federal system.

"What you're seeing on a broader level is inertia working in favor of spending reductions — for a change," said Rep. Mick Mulvaney of South Carolina, a tea-party-aligned Republican. "We're fighting on our playing field."

This week, the Senate will probably consider two proposals for temporarily averting the cuts — one offered by Democrats and backed by the White House, the other offered by Republican Sen. Kelly Ayotte of New Hampshire and designed to preserve defense spending. Partisan loyalty will probably prevent either from reaching the needed 60 votes.

As Mulvaney's words indicate, many House Republicans see the cuts as their best chance to achieve spending reductions that they feel have slipped away in previous budget deals. They made a tactical decision last month to push ahead on the issue, despite divisions in their ranks, particularly over defense, and the risk that the public will dislike the cuts and blame them.

"Republicans are saying: We need to put the cuts on the board," said GOP strategist David Winston, who is close to the House Republican leadership. "We need to start talking about how we deal with this spending problem."

But the Republican message has been a mixed one. They are taking credit for forcing the spending cuts, which are projected to reduce deficits by a total of $1 trillion over the next decade. At the same time, they insist the cuts are bad and have blamed Obama for creating them — GOP leadership aides have taken to calling the sequester the "Obamaquester."

Obama, by contrast, has employed a consistent strategy of denouncing the cuts as indiscriminate and blaming them on Republican intransigence. In recent days, he has turned up the volume with campaign-style appearances. The strategy may not produce legislative results, but could prove valuable in influencing voters.

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