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Finding an Alternative to Defense Cuts

With the sequester looming, Republicans are scrambling for an alternative that will save the defense budget and the defense industry. The Hill reports on one idea being floated by Sen. Mitch McConnell, which would increase government and sales fees — but the idea could violate Grover Norquist’s anti-tax pledge:

“If you want to turn off the sequester, and I think that’s a good idea, there is a way to do it; we spent a lot of time last year finding legitimate pay-fors in the Biden talks,” McConnell said. “There are all kinds of legitimate pay-fors that were studied on a bipartisan basis in the so-called Biden talks, leading up to the final passage of the Budget Control Act.”

McConnell’s comments reflect a growing urgency among Republicans on Capitol Hill about finding a compromise to stop $55 million in spending cuts slated for defense programs in 2013.

Senate Majority Leader Harry Reid (Nev.) and other Democrats have insisted that any replacement of the so-called defense sequester also reduce cuts to domestic programs and raise new revenues.

Focusing on sales and federal fees could be a way to raise revenues without violating the tax pledge GOP lawmakers have made to their constituents.

Democrats are demanding some sort of revenue-increasing measure to offset the defense cuts. Some possibilities that may not violate the anti-tax pledge could include fees related to Fannie Mae and Freddie Mac, and an increase in TSA fees — but Norquist’s group, Americans for Tax Reform, told The Hill that it would need to see the specific legislation before deciding whether it violates the pledge.

There are also some actions Congress can take in late September, when last year’s continuing resolution funding the government expires. As the Bipartisan Policy Center has pointed out, Congress could pass another continuing resolution to exempt war funding from the defense cuts — though that could also mean that other defense programs take a bigger hit. The Center on Budget and Policy Priorities has suggested that Congress could increase war funding this fall to a level that offsets the sequestration cuts, which is an interesting idea but would result in no real-life reductions. If it comes to that, then Congress should obviously do everything in its power to save defense; but considering our fiscal situation, it would be preferable to find other non-defense cuts to offset it, if possible.



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