How the GOP may outmaneuver Democrats on the sequester

This post has been updated, as indicated below.

Congressional Republicans may have found a way to force Democrats to accept the sequester -- for this year, at least -- thanks in part to labor protections won by federal employee unions.

The sequester is scheduled to go into effect March 1, imposing $85 billion worth of across-the-board cuts on most federal discretionary spending programs. President Obama has warned that the cuts will shorten the hours of FBI and Border Patrol agents, air-traffic controllers and federal prosecutors, hurting public safety and causing longer waits at airports and at customs.

But if the sequester does force furloughs across government agencies, they won’t go into effect until April 1. That’s because union contracts require managers to give workers 30 days’ notice.

In the meantime, Congress faces another deadline: On March 27, government departments and agencies run out of money. House Republicans tried last year to cut spending for fiscal 2013 below the compromise they struck in the Budget Control Act of 2011 -- hey, that was then, this is now! -- prompting congressional leaders to punt the issue until after the elections by passing a six-month stopgap funding bill with no additional cuts.

The thinking was that the “fiscal cliff” of expiring tax breaks and sequester-driven cuts, which were originally scheduled for early January, would finally bring the two parties together on a longer-term deal on the deficit. But it didn’t; instead, the two sides just decided what to do about the tax breaks and put off dealing with the sequester for two months.

Now, Republicans are planning to propose funding the government for the rest of the fiscal year at the lower levels required by the sequester, giving departments some flexibility to ax lower-priority programs instead of making across-the-board cuts. Such a continuing resolution would solve two problems at once: it would prevent the government from shutting down, and it would replace the mindless -- or, as many analysts put it, “stupid” -- automatic cuts with a more reasonable approach to trimming spending.

The GOP’s hope is that Democrats will go along with the plan rather than risk shutting down the government, which is what will happen if a new funding bill doesn’t pass by March 27. And because the sequester will soon be the law of the land, it would be hard for Senate Democrats to argue that the House’s proposed continuing resolution violated a prior agreement on spending levels, as was the case with the appropriations bills the House passed last year.

The alternatives favored by Obama and congressional Democrats would replace the sequester with a combination of tax hikes, lower farm subsidies and, in the Senate Democrats’ version, defense spending cuts phased in over the coming decade. I don’t see how they could pursue those as part of a continuing resolution, however; tax bills have to originate in the House, so the Senate couldn’t simply add a tax hike to a spending bill.

[Updated, 1:45 p.m., February 25: Budget whiz Stan Collender of Qorvis Communications in Washington says I’m wrong about this; the Senate can add tax provisions to any House-passed bill, even if it the measure had nothing to do with taxes. I would note, however, that doing so would require Democrats to line up 60 votes to overcome the inevitable GOP filibuster, and that’s a bridge too far. So either way, replacing spending cuts with higher appropriations and tax hikes appears to be a non-starter on a continuing resolution.]

The Democrats’ best hope in this scenario is for the sequester to inflict pain right away, persuading the GOP to put off all or part of the spending cuts until some future fiscal year. The first to feel the sequester’s effects are likely to be government contractors -- especially big defense contractors such as Lockheed Martin and Boeing -- and the beneficiaries of federal grant programs. Those groups could see a reduction in the first installment of their federal funding after March 1.

In Los Angeles County, for example, the list of federally subsidized programs on the chopping block includes community development block grants, Section 8 housing vouchers, HIV/AIDS prevention and infection-disease control efforts. But 99% of the money the county receives from Washington won’t be affected, a county spokesman reported Monday, because it comes from mandatory spending programs such as Medicaid, welfare and food stamps.

So as we lurch toward a sequester that most elected officials say they don’t want, Republicans may have found a way to keep the cuts in place minus the sequester’s most draconian feature. If they do, that may end the budget battles for a few months -- assuming the GOP leadership persuades its rank and file to agree to increase the debt ceiling to match the level of spending approved in the continuing resolution. The squabbling over the sequester can then resume in the summer, when Congress starts working on the annual appropriations bills for fiscal 2014.

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