CQ TODAY ONLINE NEWS
Updated July 17, 2012 – 10:52 p.m.
Sequester Warnings Continue to Rise
By Frank Oliveri, CQ Staff
When lawmakers passed the bipartisan deficit-reduction law last year, the sequester mechanism was designed to be so painful that it would force a compromise.
Yet there is no sign that this strategy is working, even as the Jan. 2, 2013, deadline gets closer.
The broad agreement between Democrats and Republicans that the sequester should be averted has not yet translated into any substantial discussion on alternative savings that would be palatable to both sides.
For example, former Vice President Dick Cheney met with Senate and House Republicans behind closed doors Tuesday to call for putting off the automatic spending cuts for a year, lawmakers and aides said. But he did not offer any details on how that might be accomplished.
Rep.
The gap over a possible solution also overshadowed an event that was aimed at dramatizing the potential risk of the pending $1 trillion budget sequester. The Aerospace Industries Association brought in two New Hampshire senators Tuesday as part of an escalated campaign by defense contractors and others to warn that it would trigger severe economic damage and job losses.
But the event did more to highlight the deep chasm that still separates Republicans and Democrats when it comes to the automatic cuts.
Republican Sen.
But when asked to describe a possible path to an agreement to delay or avert sequester, the answers from the New Hampshire senators were no different than a year ago.
The two parties “are clearly far apart,” Shaheen said. “We need to send a very important signal that we are going to address these issues.... You can’t get there unless revenue is on the table. You can get revenue in different ways, but my point was you have to look at everything. You have to put aside these sacred cows.”
Ayotte took a different approach.
“I think if I had my way, we would find it through spending reductions. But I understand if we are going to get members of the other side to the table we do need to have some revenue,” Ayotte said. “We can do that in a way that doesn’t hurt our economy because, in my view, raising taxes right now will have deep implications for the private sector and our small businesses, in particular.”
Ayotte, however, offered only one specific way revenue could be raised: selling off public lands. Questioned about Ayotte’s suggestion, Shaheen simply repeated that revenue would need to be part of the equation.
Sequester Warnings Continue to Rise
But where Democrats would favor higher taxes on wealthier Americans, Republicans like Ayotte oppose such tax increases.
“We do need to do a large agreement that deals fundamentally with the drivers of our debt, which includes tax reform, in my view, a model that would simplify and lower rates along with looking at deficit reduction and entitlement reform, all of it together,” Ayotte said.
‘Mini-Simpson-Bowles’
Republican Sen.
Such a plan, he said, could be like a “mini-Simpson-Bowles,” referring to the 2010 National Commission on Fiscal Responsibility and Reform chaired by Alan K. Simpson, a former Republican senator from Wyoming, and Erskine Bowles, a Democrat who was chief of staff to President Bill Clinton.
Graham said the one-year delay could include the required revenue offset in the same way the Simpson-Bowles commission suggested, which was a mix of spending cuts and revenue increases that came from a tax overhaul.
“Let’s take the concept for one year and apply it on the defense side,” said Graham.
His remarks come one day after a speech by Sen.
They also follow a snippy exchange of letters and press statements over the sequester between Rep.
Even as some Democrats, including President Obama, appear increasingly willing to allow the sequester to take effect unless a compromise materializes, there are some voices emerging on the right with a similar sentiment.
“To be clear, sequestration is not the best way to cut the military budget, or federal spending overall,” Christopher A. Preble, vice president at the Cato Institute, the libertarian think tank, wrote in a blog post Tuesday. “But it may be the only feasible way to cut spending. And it isn’t going to get any easier in the future.”
That kind of talk is only prompting defense contractors and their allies on Capitol Hill to issue ever more dire warnings.
The AIA study, conducted by Stephen S. Fuller, who runs the Center for Regional Analysis at George Mason University, concluded that about 1.1 million defense-related jobs and just over 1 million non-defense jobs would be lost under sequester, as mandated by last year’s deficit reduction law (PL 112-25).
Sequester Warnings Continue to Rise
Ayotte, citing the study, noted that several key presidential election battleground states could face significant job losses: Virginia could lose a total of 207,571 jobs, mostly in the defense sector; Florida would lose more than 79,000 jobs; and Pennsylvania would lose more than 78,000 jobs.
Debt-Limit Vote?
Adding the federal debt limit to the increasingly heated political debate on Tuesday, House Democratic Whip
There is no definitive date forecast for when the United States will reach its borrowing limit, but the need to raise the debt ceiling last year marked the trigger of the budget confrontation that led to the sequester law.
“Last year, we took the country to the brink of default, and we were downgraded,” Hoyer said. “Do it now. Stop pretending that this is a political issue on which there are two reasonable political positions. There are not.”
House Speaker
Alan K. Ota, Richard E. Cohen, Emily Cadei and Kerry Young contributed to this story.
First posted July 17, 2012 2:44 p.m.