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Fiscal Cliff Part II: The Sequester

Written By Brian Hicks

Posted February 26, 2013

We hope you haven’t forgotten the fiscal cliff drama, because if you have, this weekend is about to send you right back in time.

Long story short, a “sequester” is going to activate this Friday, and that means Congress is running out of time to avert widespread spending cuts that will remain in effect until they have resulted in savings of $1.2 trillion over the next ten years.

Right now, both parties are scrambling to put together proposals to try and stave off the forthcoming spending cuts, but given Washington’s famed lack of skill at deals and the short time remaining, it’s unlikely that we will see anything productive by Friday.

Republicans, for example, are trying to work out a plan that will keep the cuts in place but give the administration more control over applying them. They’re also trying to move around the defense cuts strategically so as not to diminish national security.

Democrats, on the other hand, are working to put the sequester off until next January and replace it instead with about $110 billion in extra tax-based revenue and a series of smaller spending cuts. Of that $110 billion, some $54 billion would come from having most millionaires (and above) pay at least 30 percent income tax.

More boldly, Republicans have publicly wondered whether the effects of the sequester really would be so widespread or dire as the Obama administration has been claiming, while Democrats are banking on public outcry to gain momentum for their plan to go through.

But, predictably enough, the GOP has declared that it won’t listen to any deals carrying new revenue, given that they already accepted an arrangement with more taxes back in January.

Here’s how the Washington Post sums it up:

A White House budget official last week acknowledged that the impacts of the sequester will “get worse over time” but that “the pain points are there.”

As if this week’s sequester weren’t enough, Congress’s last short-term funding plan runs out of time on March 27th. A new plan must be approved before that, and you may be sure that means more partisan warfare over budgets. Unless, that is, we’re in the mood for yet another government shutdown.

What’s worrisome is that the sequester has kicked up nowhere near the amount of dust that the fiscal cliff drama did some months ago. What we can expect is likely a rehash of each party blaming the other all the way into Friday before magically resolving the situation in some sort of half-cocked deal that won’t really do much other than postpone issues.

Federal agencies like the Defense Department and Homeland Security have stated that they may implement unpaid leaves to try and fulfill their budgetary requirements.

As the Washington Post outlines, states will be affected differently under the sequester. Virginia, Maryland, and D.C. would lose $29 million altogether in elementary and high school funding (because that’s where we’re overspending)—something that would affect 390 teaching and teaching-related jobs and nearly 27,000 students.

Some 2,000 poorer children will completely lose access to early childhood education. The reduced funding would also affect sexual health drives, meaning possibly 31,400 fewer HIV tests. Over in the Defense Department, some 150,000 civilian personnel would be placed on partial furlough through September 30.

Meanwhile in Ohio, more teachers (numbering in the hundreds) stand to lose their jobs, while Georgia may see thousands of kids miss out on their vaccinations.

The White House is targeting Republicans squarely with this one:

“It’s important to understand why the sequester is going to go into effect,” said Dan Pfeiffer, an Obama senior adviser. “The Republicans are making a policy choice that these cuts are better for the economy than eliminating loopholes that benefit the wealthy.”

Really, though, it’s mostly brinkmanship at this point. Little is likely to occur by Friday, and what the parties are doing now is basically framing the terms of the debate in order to gear up for the real fight later in March this year.

If this sequester extends past March 27, then it will actually remain in place for the remainder of the fiscal year. Nobody, even the resolutely fractured Congress, wants that.

On the other hand, it can stop the sequester-caused cuts at any point if it can come up with an alternative deficit-slashing deal even after Friday. That’s why, right now what matters is how each party takes its stand and heads into the fight.