GOP Lawmakers Say Deficit Reduction Outweighs Short-Term Economic Blip

By Paul M. Krawzak, CQ Roll Call

Congressional Republicans said Thursday that a small contraction in the economy at the end of last year has not weakened their determination to reduce federal spending, even if that means letting the automatic cuts go forward.

Analysts blamed reduced government spending and business inventories for the 0.1 percent decline in the gross domestic product during the October-December period. Some Democrats blamed the looming automatic spending cuts that are scheduled to begin March 1.

“One way or another, we’re going to cut spending by $1.2 trillion,” said Rep. Tom Cole, R-Okla., referring to the amount that would be cut over nine years by the sequester mechanism established by the 2011 debt limit law (PL 112-25).

Rather than focusing on the three-month fall in gross domestic product, Rep. James Lankford of Oklahoma and other GOP lawmakers point to the overall weakness of the economy, which they blame on President Barack Obama’s policies. “This doesn’t change my tenacity to cut government spending so that we can increase private investment,” said Lankford, the chairman of the House Republican Policy Committee.

Sen. Mike Johanns, R-Neb., said he doubts that the economic report will affect the Congressional debate over what to do about the sequester. “I just have a feeling the sequester’s going to happen,” he said. “I just think there’s so much concern about the debt and spending that it overrides most issues these days.”

Most lawmakers in both parties would prefer that sequestration not occur. But Republicans say the automatic cuts will be canceled only if they’re replaced with other spending cuts. Democrats insist on a balanced alternative that includes increased revenue.

Cole argued late last year during fiscal cliff negotiations that Republicans should accept higher tax rates on the affluent in order to prevent increases for all taxpayers. But he said Thursday that Republicans are united in their determination to prevent additional tax hikes. “You’re not going to get Republicans to raise taxes,” he said. “Taxes just went up.”

Cole predicted that the $85 billion sequester will take effect March 1 unless Democrats agree to replace it with spending cuts alone.

Sen. Mike Crapo, R-Idaho, said the drop in GDP adds urgency to the search for a way to avoid sequestration. He predicted that the automatic cuts would have a short-term adverse effect on the economy.

But, he said, he remains committed to ensuring that the deficit reduction, which sequestration would achieve, is preserved. “I believe we need to be very careful to protect the bottom-line savings numbers so that we don’t do what Congress always does with every budget it adopts, which is to, basically, a year or two later say we can’t achieve the savings,” he said

“In the short term, more spending can help to keep the economy chugging along,” Crapo said. “But the long-term impact of that borrowed spending is detrimental to the economy.”

Sen. Kelly Ayotte, R-N.H., who has been pushing to avert the sequester’s cuts in defense spending, said sequestration “looks like . . . where we’re headed.”

“The president said very clearly in his campaign that sequestration is not going to happen, but I haven’t seen the leadership from him to say this is an absolute priority and to bring people together to resolve it,” she said.