With the U.S. election over, averting more than $1 trillion in automatic government-wide spending cuts must become Washington’s top priority.
To extend the nation’s borrowing limit in 2011, lawmakers passed the Budget Control Act, which directed $1 trillion in immediate cuts across government — half from defense — and another $1 trillion by Jan. 2 absent a broader deficit-reduction deal.
The fear is that a cut so deep and sudden across government — 10 percent off each program, project or activity and half from DoD — would undermine an improving but still fragile economy.
President Barack Obama has exempted military manpower from cuts, so acquisition, services and operations will be hit harder if sequestration happens. But he also has made clear his conviction that such a draconian outcome will be avoided.
Fortunately, there is bipartisan agreement that sequestration would be bad, specifically
because of the untargeted and traumatic way it would cut
defense spending: Everything would be cut equally without differentiation.
While many concede that defense can bear deeper cuts in coming years, the problem with sequestration is accommodating such a deep hit in year one, given that budget cuts would come on top of a 10-year, $489 billion budget cut outlined earlier this year.
America finds itself on the so-called fiscal cliff, which combines both the sequestration threat and the anticipated expiration of Bush-era tax cuts, because Congress and the White House failed to craft a bipartisan compromise over the past two years.
Republicans, having sparked the crisis by threatening to block an increase to the nation’s borrowing limit, had hoped that stonewalling the president would push him from office so they could strike a deal with one of their own.
It didn’t work.
The day after elections, Americans awoke with the same president, roughly the same Congress and the same problems. Obama and Republican leaders have discussed reaching across the aisle to compromise, but both sides are cool to any deal that undercuts their parties’ principles.
They must relent. America needs a deal.
Though months of tense negotiations lay ahead, and ideological differences inevitably will tempt both sides to quit, it is imperative that leaders seize this moment and move quickly toward compromise. The days of my-way-or-the-highway negotiations are over.
The president and Congress must act swiftly, not only to avert sequestration, but also to again raise the nation’s borrowing limit, a necessity that no amount of partisan gamesmanship can deny. Remember, the U.S. ended up with the sequestration solution only after some in Congress nearly pushed the government into
default, causing credit-rating
agencies to issue warnings about American debt.
Credit-rating agencies are again warning they may downgrade America’s credit if a deal cannot be made. That, in turn, will drive up America’s debt burden, expanding the deficit and forcing even more draconian cuts. Reverberations would be felt around the world.
As Obama has said, no deal will be to everyone’s liking. But the time for advisory commissions and blue-ribbon panels has come and gone. Together, the administration and Congress must prudently trim spending, increase revenues by allowing at least some of the Bush-era tax cuts to expire, and raise the debt ceiling.
Those seeking a true austerity budget can look to Europe to see what that will bring: higher unemployment and a stagnant recovery.
America must do better than that. And with bipartisan compromise, it can. The consequences for the economy that underwrites U.S. national security are too great for failure to be an option.