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JUNEAU: March Madness

JUNEAU: March Madness
February 22
11:59 2013

Unless the unlikely happens, on March 1 the much cussed and discussed federal sequester will automatically trigger, cutting some $1.2 trillion over 10 years across the board in both defense and discretionary (non-entitlement) spending. The sequester is the product of an earlier budget battle royal, the 2011 fight over raising the debt ceiling. The key to the compromise at that time was the sequester proposal that both Republicans and Democrats felt would force the other side to compromise on the size and shape of the spending cuts. It didn’t happen as conceived, and in a few days the sequester will be birthed.

The public uprising that the president and members of congress felt would materialize because of the sequester’s impact simply did not appear. It isn’t that the public thinks the sequester in its current form is necessarily a good idea. The across-the-board nature of the cuts makes no sense. Putting travel and office supply line items on the same level as salaries and military training is a goofy concept. Congress could easily fix this by passing legislation that would allow the departments and agencies to determine exactly what they would cut to achieve the dollar reductions called for. Congress doesn’t like that idea because they want to micromanage how the agencies spend their money. President Obama isn’t for that idea either because he doesn’t want to ease any of the pain of the sequester. He wants to replace the spending cuts in the sequester with more taxes.

The House of Representatives passed bills twice that would rearrange the cuts in the sequester, but the Senate never acted on those proposals. No one expected the Democratic-controlled Senate to like the version enacted by the Republican majority in the House. However, the Senate could amend the House version to a more palatable form and send it back—or pass its own version. That hasn’t happened and won’t happen.

After “winning” the fiscal cliff battle, when the president defined “winning” as raising well over $600 billion from the higher earners’ income taxes, he and the Democrats in Congress believed that public pressure over the looming cuts would force the Republicans to swallow more tax increases to soften the sequester. They miscalculated their win.

Widely regarded pollster Scott Rasmussen conducted some interesting polling on this issue. In a recent column, Rasmussen noted that only 36 percent of the voters want the automatic cuts stopped. In spite of the potential horror stories pouring forth from news articles and the White House daily press briefing, only 39 percent of the public supports replacing the current sequester with a combination of targeted spending cuts and more tax increases. Perhaps the reason for the lack of support comes from another finding in Rasmussen’s poll: “Only 17 percent believe that the sequester will actually reduce spending.” The 17 percent are correct. It will only reduce the rate of growth of the spending, not the spending itself. As Rasmussen points out, the last time federal spending actually dropped from one budget to the next was in 1954.

The real fear of the big spenders in both parties in Washington is the possibility that the voters will actually applaud spending cuts, not rebel against them. In fact, 68 percent of the respondents in the Rasmussen poll felt that cutting government spending is the best thing to do to improve the economy. While it may be difficult for many voters to grasp the magnitude of the deficits and the federal debt, there may be a growing awareness of the fact that federal spending—regardless of the horror stories in the media—always goes up while the voters’ spending struggles to remain the same.

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