One of the most puzzling answers that President Obama gave in the third presidential debate concerned the subject of sequestration—the process that will result in across-the-board cuts to spending of $1.2 trillion starting in January, with half that amount being cut from the defense budget. When the subject came up, Obama said, “First of all, the sequester is not something that I’ve proposed. It is something that Congress has proposed. It will not happen.”
As it happens, neither part of that short statement is strictly factual. Regarding the president’s claim that he did not propose sequestration—on this score he is flatly contradicted by Bob Woodward who wrote in his recent book, The Price of Politics, that sequestration originated in the White House and was sold to Senate Majority Leader Harry Reid by budget director Jack Lew and legislative director Rob Nabors. Woodward now says: “What the president said is not correct. He’s mistaken. And it’s refuted by the people who work for him.”
Both parties have good reason to avoid another government shutdown standoff this fall, as the fiscal year ends a little more than a month before the election. Any hint of Republican obstructionism in the House will be used in anti-Romney attacks, and Senate Democrats won’t want to rock the boat so soon before Election Day. Roll Call reports both sides are nearing a compromise on a continuing resolution to fund the government for another six months, which they’ll vote on before the Sept. 30 deadline:
The announcement of a House-Senate deal to fund the government for the six months after Sept. 30 appeared imminent this afternoon.
Senate Majority Leader Harry Reid (D-Nev.) has said that any spending agreement would have to be at the $1.047 trillion level established by last year’s debt limit law. Current funding runs out at the end of the government’s fiscal year Sept. 30, and without new appropriations or a stopgap continuing resolution, the government would shut down. …
The continuing resolution could not be considered by either chamber until after the August recess, sources said, because the Congressional Budget Office would need time to score the proposal. In addition, the White House’s Office of Management and Budget will need to provide Appropriations Committee staffers with lists of changes from the current spending levels called “anomalies” for inclusion in the measure.
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.
If you missed Thursday’s Wall Street Journal editorial on defense sequestration, go back and read it. It’s as powerful a case as I’ve seen about the damage that mindless budget cutting will do to our nation’s defense. It also makes a powerful case that President Obama is being negligent for refusing to get together with concerned lawmakers to stop the deep slashes in defense spending that are due to begin in January. Instead, the president and Sen. Harry Reid are using the threat of sequestration to try to pressure Republicans into agreeing to tax increases.
Of course, the fault is not entirely the president’s. Hill Republicans also bear part of the blame, as the Journal notes, for accepting “the sequestration deal while leaving entitlements off the table, thus handing Mr. Obama more leverage.” That Republicans voted as they did last summer, despite the misgivings of many members, was understandable given that the federal government faced the threat of default if the budget ceiling wasn’t lifted—but nevertheless, the vote was a mistake and one that may come back to haunt the country.
There’s no question the automatic budget cuts set to take place next January will have major national security implications, but what about the economic fallout? Sequestration doesn’t just mean a reduction in military readiness, it also means reductions in defense and non-defense jobs. According to a new study by the Aerospace Industries Association, the unemployment rate would reach 9 percent or higher under these cuts (h/t Rob Bluey):
“The results are bleak but clear-cut,” said [Dr. Stephen S.] Fuller. “The unemployment rate will climb above 9 percent, pushing the economy toward recession and reducing projected growth in 2013 by two-thirds. An already weak economy will be undercut as the paychecks of thousands of workers across the economy will be affected from teachers, nurses, construction workers to key federal employees such as border patrol and FBI agents, food inspectors and others.”
The analysis concludes that the automatic spending cuts mandated in the Budget Control Act of 2011 affecting defense and non-defense discretionary spending in just the first year of implementation will reduce the nation’s GDP by $215 billion; decrease personal earnings of the workforce by $109.4 billion and cost the U.S. economy 2.14 million jobs.
This is about more than national security. A sudden reduction in defense-sector jobs could devastate whole communities, flooding the already-oversaturated job market with masses of newly unemployed. These aren’t unnecessary or obsolete jobs, they’re ones that are still critical for national defense.
For most Americans, World War II is distant history–a setting for adventure films such as “Captain America,” History Channel documentaries, and not much more. It is startling, then, to be reminded of the virulence of historical memory in Asia.
Only two years ago, there were substantial anti-Japanese protests in China. The ostensible cause was a clash between Chinese fishing vessels and a Japanese patrol boat in the East China Sea, but it was really a revelation of the deep emotions that remain from the Japanese occupation of a large part of China during the 1930s-40s which included the infamous Rape of Nanking. Now in South Korea, a top national security official has had to resign because of his temerity in negotiating an accord with Japan to share intelligence over a mutual threat–North Korea.
You would think this pact between two pro-Western democracies would be a no-brainer, but as the New York Times account notes, “After the Lee government announced the deal last Thursday, accusations flew that the government was ‘pro-Japanese,’ a far worse charge in South Korea than being ‘pro-North Korean.’” Hatred of Japan is of course explained by the brutality of Japan’s colonial occupation of Korea during the first half of the 20th century, which included the sexual enslavement of Korean “comfort women.” Emotions remain raw in no small part because Japan, unlike Germany, still has trouble fully acknowledging the wrong it has done. I recall a few years ago visiting the Yasukani Shrine in Tokyo, whose museum continues to glorify the actions of Japan’s war criminals.
The evidence builds about the catastrophic costs of sequestration–the automatic budget cuts, amounting to half a trillion dollars during the next decade, that will devastate the defense budget starting on Jan. 1 or actually even earlier because companies will have to start laying off workers in preparation.
The Bipartisan Policy Center in Washington has issued a new report under the authorship of former National Security Advisor General James Jones, former Chairman of the Senate Budget Committee Pete Domenici, and former Secretary of Agriculture Dan Glickman that finds that, if sequestration were to occur, the economy would lose more than a million jobs in 2013 and 2014. Glickman rightly described this as as a “reverse stimulus plan” and Domenici–known for being a fiscal, not a national security, hawk–called it a “fiasco.”
Deputy Secretary of Defense Ash Carter is absolutely right when he says of the looming defense “sequester”–$500 billion in defense cuts to be implemented during the next ten years, with $55 billion to be cut on Jan. 1, 2013—that it would “ have devastating effects on our readiness and our workforce, and disrupt thousands of contracts and programs.”
And those devastating cuts would not stop at the water’s edge. Even troops in combat would be hurt. The Pentagon has just admitted that Overseas Contingency Operations funds which are used to fund operations in Afghanistan would be cut, too. That would probably mean a cut of approximately 15 percent, or $13 billion, in supplemental funding of $88.5 billion for the next fiscal year. It is hard to imagine how U.S. troops or their Afghan allies could continue to operate at planned levels with 15 percent less in funding. It may be possible to cut support personnel here and there, but a lot of that has already been done on that score to accommodate the president’s caps on the number of troops permitted in Afghanistan.
Notwithstanding the preponderance of support personnel among U.S. troops in Afghanistan (or in any other theater), this will have a direct impact on combat capacity. There are scheduled to be 68,000 U.S. troops in Afghanistan after September. If 15 percent less funding translates into 15 percent less troops (most likely the case) it would mean a cut of another 10,000 troops, the equivalent of two Brigade Combat Teams. Given the scarcity of combat personnel already being felt in Afghanistan, as commanders scramble to comply with the White House’s drawdown timetable, this could have serious consequences for the ability of NATO forces to maintain the progress made during the past two years.
I applaud House Republicans for voting to suspend the sequester which threatens to decimate military spending and replacing it with cuts to social welfare programs. But the Republican leadership knows their legislation has little chance of passage in the Senate. They are simply hoping to set the stage for negotiations later this year that would at least suspend the first stage of the sequester which could cut another $500 billion or so from the defense budget on top of $450 billion or cuts already set in motion last summer.
The question is whether those negotiations will succeed. The conventional wisdom in Washington is that the answer is yes, but I join Mackenzie Eaglen of the American Enterprise Institute in being skeptical of that consensus. She points out that there is no intrinsic reason to think Democrats and Republicans, who couldn’t agree on alternative spending cuts or revenue increases until now, will suddenly find some way to sing “Kumbaya” after the election–especially when the composition of Congress will be exactly what it is today. And there are many reasons to expect that an attempt to stop sequestration will not be a high priority item for Congress also grappling with expiring tax cuts and the need to raise the debt ceiling once again.
In an interview with CNN’s Candy Crowley, Rep. Paul Ryan backed away from his comments that questioned whether generals were being honest with Congress by supporting the Obama administration’s defense budget proposal.
Ryan told Crowley that he “misspoke” last week, and said he has called Joint Chiefs of Staff Chairman Gen. Martin Dempsey and apologized:
“Yes – no, I really misspoke, to be candid with you, Candy. I didn’t mean to make that kind of an impression. So I was clumsy in how I was describing the point I was trying to make. And the point I was trying to make – and General Dempsey and I spoke after that. And we – I wanted to give that point to him, which was, that was not what I was attempting to say.
What I was attempting to say is, President Obama put out his budget number for the Pentagon first, $500 billion cut, and then they began the strategy review to conform the budget to meet that number.
We think it should have been the other way around. What is the best strategy for our military and so we have a strategy driven budget. Now the result of our review of the president’s budget on the military was we should cut $3 billion from the Pentagon budget over the next 10 years instead of the $500 billion.”
Robert Samuelson has a typically excellent column in the Washington Post today where he points out the dangers of looming sequestration–the requirement, enacted by Congress last summer, that more than $500 billion in defense spending will be cut next January along with the nearly $500 billion that has already been cut this year. Many lawmakers are talking as if it’s a done deal that sequestration will be put off at least for one year, but Samuelson isn’t so sure and neither am I. He writes that in November,
[o]ne party and perhaps both will be embittered by the election’s outcome. Congress will face two and possibly three highly contentious issues: the expiration of the Bush tax cuts of 2001 and 2003 at year-end; the looming start of the sequester; and, possibly, the need to raise the federal debt ceiling (the Bipartisan Policy Center estimates this could occur in November).
The confluence of so many big issues — with timetables — could inspire a grand compromise. It also could produce chaos. The sequester could take effect by default and confusion. The Obama administration’s continuing embrace of the sequester as a political lever, when it clearly hasn’t worked, makes this outcome more, not less, likely.