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Obama to Congress: Cut a deal on sequestration

Feb. 19, 2013 - 12:59PM   |   Last Updated: Feb. 19, 2013 - 12:59PM  |  
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President Obama on Tuesday said "Congress must act" to avoid pending automatic defense and domestic spending cuts, and slammed congressional Republicans for being too unwilling to compromise.

At issue are twin $500 billion cuts to planned national defense and domestic accounts slated to be triggered March 1 and take effect 26 days later. Since those deadlines were set in early January, neither political party has budged from positions on key issues such as taxes and entitlement programs.

"They don't have to happen," Obama said during remarks at the White House. "Congress has to act. …. I am willing to cut more spending that we don't need [and] get rid of programs that aren't working."

Using his increasingly confrontational public persona when talking about Capitol Hill Republicans, Obama bluntly said: "Congress hasn't come together and done its job."

The president repeated an idea he floated during last Tuesday's State of the Union address: Enact entitlement program reforms to generate savings that were first proposed by his fiscal commission in 2010, which was chaired by former GOP Sen. Alan Simpson of Wyoming and Democrat Erskine Bowles, President Bill Clinton's former chief of staff.

Obama rejected what he called a leading Republican attack line: that Democrats want to replace the pending sequester cuts and achieve more deficit reduction with a plan built on "all taxes." The commander in chief insisted he and Democrats in the Senate both have put forth "balanced" proposals built on tax reform with spending reform."

He also charged Republicans with favoring fiscal policies that won't lead to a sequestration-replacement deal because GOP leaders oppose taking any action except new deep cuts to federal spending.

"I know that Republicans have proposed some ideas, too," Obama said. "But, so far, the Republicans' ideas ask nothing" of the "1 percent" of highest earners or major corporations, he added, vowing to "not sign" any sequester-averting or fiscal deal he believes hurts the middle class.

In a statement released moments after Obama concluded his remarks, GOP House Speaker John Boehner, R-Ohio, fired back at the president, casting doubt on their ability to reach a deal.

"Washington Democrats' newfound concern about the president's sequester is appreciated, but words alone won't avert it," Boehner said. "Replacing the president's sequester will require a plan to cut spending that will put us on the path to a budget that is balanced in 10 years. … What other spending is the president willing to cut?"

Before Obama took to the podium, there appeared to be a bit of movement toward a deal via Twitter.

Boehner's office tweeted this: "GOP has long supported closing tax loopholes in order to simplify code, create jobs, expand opportunity for all. POTUS wants to spend more."

About an hour later, Obama pushed the notion of using tax loophole-closing measures to replace part of the sequester cuts. He said doing so would produce "hundreds of billions of dollars" that now unfairly go to the richest Americans and biggest corporations.

Progress, right? Wrong.

In his statement, Boehner made clear while he and the president agree on the loopholes, they are miles apart on how Washington should use the revenues doing so would create.

"Once again, the president offered no credible plan that can pass Congress, only more calls for higher taxes," Boehner said. "Just last month, the president got his higher taxes on the wealthy, and he's already back for more."

The Obama-Boehner rhetorical jousting comes after a contentious few weeks. The climate for compromise seemed unlikely as both chambers of Congress took off late last week for planned weeklong recesses.

Congressional Republicans doubled down on their efforts to blame Obama and his administration for coming up with the idea of the sequester cuts in August 2011. They even unveiled a Twitter hashtag to drive home the point: #Obamaquester.

Congressional Democrats, joined by the president and his senior aides, spent last week hammering Republicans for, as they see it, being unwilling to compromise, and insisting that any sequester-avoidance bill feature nothing but new federal non-defense spending cuts.

The two sides need to agree on a package of cuts and/or revenues that total around $1 trillion to permanently turn off the sequester cuts, or a smaller package that either gets rid of the first year of cuts or delays them again.

The biggest hurdle, as evident in Obama and Boehner's remarks, is that the political parties simply do not agree, at this moment, on enough components of a plan that would delay or replace the pending sequestration cuts.

The GOP-controlled House last session passed two bills that would avoid the pending defense cuts; but those were DOA in the Democratic-controlled Senate, which wants some mix of revenue and cuts.

Senate Democrats last week introduced legislation that covers the remainder of fiscal 2013, and calls for $55 billion in spending cuts and $54 billion in new tax revenue. It reflects the kind of "balanced approach" long called for by Obama and congressional Democrats.

The legislation calls for the cuts to be split between national defense accounts and non-defense accounts. It would slash Pentagon spending by $27.5 billion over a decade, with an identical amount coming by terminating some agriculture subsidies.

It is expected to be taken up by the full Senate early in the week of Feb. 25, after the chamber returns from the recess.

The Senate Democrats' bill, however, might not even make it to the upper chamber floor. Liberal members want it to raise more revenue, and GOP defense hawks oppose even $1 more in Pentagon budget shrinkage.

And even Democratic-leaning budget analysts are unhappy that the defense cuts it would require would not kick in until 2015, with the biggest one-year reduction being $5 billion early next decade.

Monday kicked off with Simpson and Bowels releasing a new fiscal plan that notes Washington has already pared the federal debt by $2.7 trillion. The duo calls for Congress and the White House to enact $2.4 trillion in additional debt-slicing measures.

To get there, Simpson and Bowles are not calling for a specific amount of new national defense cuts. But a summary of their new plan calls for Washington to "strengthen limits on discretionary spending" already in place.

"We must cut spending and encourage efficiencies in defense, non-defense, and mandatory spending programs, as well as in the tax code," states the Simpson-Bowles summary. Most of their new plan calls for a mix of cuts, as well as tax code and health care reforms.

On the sequester cuts, Washington should "replace [the] dumb cuts with smart reforms," say Simpson and Bowles. Sequestration "should be replaced with targeted reforms that focus on the drivers of the debt while eliminating redundant, wasteful, ineffective or unwarranted federal spending while preserving high-value investments."

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