Let’s look at next month’s Calendar.
March 1st – this Friday: I can find no indication that some sort of deal will be reached by Friday , so the “sequester” figures to go into effect, which means the government will cut about $85 billion between now and Sept. 30, about half from defense and half from other discretionary programs. This means that roughly 7% of these two areas (by my quick calculation) is projected to be cut over the next few months, with cuts ranging from about 5 to 9%.
Those would be substantial cuts, and the Obama administration, wanting to put pressure on the Republicans, has been playing that up with details of what will be cut and the public pain it might cause, like long lines at the airport. But the question is how and when will these cuts take place. Some might not take place at all and others be quickly reversed. For starters by Sept 30, “the nonpartisan Congressional Budget Office predicts that agencies will reduce actual spending by only about $44 billion, with the remaining cuts carried over into future years.”
So, right there the $85 billion in immediate impact is nearly cut in half.
Also, there will be no immediate impact, or next to none. The cuts will happen gradually giving Congress the opportunity to make various adjustments in the days ahead, such as refunding elements that have been cut, most likely starting with the military. Many of the cuts will come in the form of layoffs, which won’t begin to happen until April or so, giving Congress at least a month of flex time to do some horse trading.
It could actually become interesting.
The question is: Who can find the leverage to get the other side to do what? Right now the Republicans seem content to let the cuts fall where they may and blame Obama for coming up with the sequestration idea to begin with in August of 2011, even though they voted for it and Boehner made it sound like a good idea at the time (to paraphrase him: I got 98% of what I wanted). I don’t think it worth arguing the point, but it is my understanding the Obama team did come up with the idea, being that these budget cuts would become automatic if the two parties could not work out a more sensible solution by now.
Furthermore, my guess is that even back then the President could imagine things coming to this point given Congress’s habitual inability to come up with sensible solutions to anything. So, if re-elected, he would have the advantage now, and recent polls suggest he does. However, to speculate some more, I believe he thought the Republicans would have to work out a deal with him in order to keep part of their traditional identity in tact: a strong military first and foremost.
The stumbling block has been that the Republican Tea Party types are so fixated on cutting spending, they seem willing to cut it from anywhere, even the military. Or course, hawks like John McCain aren’t on board with that, but the Republican Party is more splintered these days than an old park bench, a topic I will let lay for the moment.
So the sequestration cuts, at least the first tiny slices, figure to begin Friday.
There seems likely little immediate impact of this congressional dilly dallying unless Wall Street gets spooked by it all. So far they’ve taken it in stride. Teetering-on-the-cliff politics has become old hat.
March 19 – Tuesday: The NCAA Basketball Tourney begins, a form of madness that is much more fun, at least for me. This year seems particularly wide open as there is no one team that has proven dominant with the #1 ranking bouncing around like a volleyball. For those of you who do pools, give the St. Louis Billikens an extra gander and a Google before counting them out.
March 27 – Wednesday: Supposedly the federal government loses its authority to spend money, or perhaps it is March 31 (I’ve read both dates). That means the government shuts down as happened for 28 days when Bill Clinton was President. This sounds drastic and, given the present Congress, just might prove to be. Who knows? But we have a few weeks to take a closer look at this next “cliff”.
March 31 – Sunday: – Those not really interested in anything said so far might want to know that the Major League Baseball season begins with the Texas Rangers vs. the Houston Astros. It also might be the day the federal government shuts down, but I doubt it.