On March 1, sequestration is set to automatically begin. It was temporarily delayed as part of the resolution to the fiscal cliff negotiations, but now it’s mid February and the debate is heating up again. The series of automatic spending cuts is far from perfect, but there are solid arguments for letting it go through.
Both the fiscal cliff and sequestration were results of the 2011 debt ceiling conflict. The US has been running trillion dollar deficits with no attempt to address the problem or even pass a budget since 2008. America’s credit rating has been downgraded and in 2011 when the debt ceiling was about to be reached, Republicans demanded that actions be taken to address the deficit problem before they agreed to raise it.
The result of this was the Budget Control Act of 2011. This demanded steps to address the deficit in the form of both tax increases (fiscal cliff) and spending cuts (sequestration). Neither was ideal, and both represent a significant compromise. This is particularly true of sequestration, which protects some of the areas of the highest spending (entitlements), and also cuts defense spending. Sequestration cuts would amount to $85 billion.
Democrats have begun to speak out against sequestration and spending cuts in the days leading up to the negotiations. They say that the cuts would lead to job losses and slow the economy, citing layoffs of federal employees, including correctional officers and USDA food safety inspectors. In addition, it would lead to cuts in embassy security and Hurricane Sandy aid. They advocate replacing sequestration with a mixture of lesser spending cuts and additional tax increases.
For Republicans, sequestration is far from perfect. It does not target or even call for examination and refinement of entitlement programs which present an increasingly serious spending issue. Fully half of the cuts, however, target defense and security, including border security, which are both valued by Republicans more than Democrats.
Since only half of Sandy relief will go to helping the storm’s victims, and only approximately $1.9 of the $51 billion will be cut, this is not an issue which will directly impact survivors. Similarly, embassy security funds go not only to providing security, but also to endeavors such as “greening” embassies and replacing their cars with Chevy Volts.
The value of sequestration, though, is not that it’s the best solution; it is that it’s the only available solution to a critical problem. It is impossible to address yearly trillion dollar deficits with only tax increases (which in and of themselves slow the economy); spending cuts are necessary. Spending, however, has only increased (and drastically) in recent years.
The debate over sequestration is heating up in the weeks before it is set to take effect, and even Obama is expected to address it in Tuesday’s State of the Union address. The core argument between tax hikes and spending cuts is not a unique one, what is unique is the framing of the negotiations in a time-sensitive way, with those negotiations split between the two issues. This time, however, the Republicans (who have offered alternatives to avert sequestration) have more leverage than in the fiscal cliff negotiations, because the automatic scenario provides for spending cuts.