WASHINGTON—Who was the last president to reduce the national debt year to year? Dwight D. Eisenhower, nearly 60 years ago.
U.S. Rep. Tim Huelskamp knows this bit of trivia because Eisenhower’s presidential library and museum is located in Abilene, Kan., which is part of Huelskamp’s congressional district.
Today’s lawmakers aren’t like Ike. Instead they squabble and fret over slicing $85 billion dollars when 2013 may mark the fifth consecutive year of trillion dollar annual deficits.
That’s what’s happening with the series of across-the-board spending cuts that are supposed to take place on March 1. They are only (potentially) happening on that date because lawmakers managed to get them delayed from their original effective date of Jan. 2. Politicians concocted the $1.2 trillion in cuts spread out over 10 years, called the sequester, way back in the summer of 2011.
At that time lawmakers were at an impasse over another increase in the federal government’s borrowing authority. Republicans wanted to include spending cuts that matched the debt limit increase. Lawmakers decided to attack the sacred cows of both Republicans and Democrats: The Defense Department and domestic programs would each lose $600 billion over the next decade.
A Democratic congressman called the cuts “a Satan sandwich.” Republicans in districts with a military imprint voted for the cuts because congressional leaders told them the sequester would never happen. The meat ax approach was designed to be so distasteful that it would spur Congress to negotiate more discriminate spending reductions. Seventeen months and a presidential election later, that didn’t happen. The bipartisan stick was not big enough to overcome Washington’s ideological divide.
Lawmakers did come together long enough to kick the can down the road for two more months (and in the process slice $110 billion from this year’s scheduled cuts). It was another example of the postponing, lessening, or outright undoing of any effort at federal belt tightening.
But evidence is growing that, even though they’d like the cuts to be configured differently, congressional Republicans plan to take a tough stance against letting the sequester fizzle out. Stung by January’s lopsided fiscal cliff deal that gave President Obama $800 billion worth of tax hikes in exchange for little if any actual spending reductions, Republicans are planning on re-entrenching themselves behind the spending cuts found in the sequester.
“The only thing worse than the sequester cuts would be no cuts at all,” Huelskamp said. This opinion is expected from a noted deficit hawk who lost a committee post for being too fiscally conservative in the eyes of establishment Republicans. But he is not alone in going to bat for the sequester. Paul Ryan, the House Budget Committee chairman who spoke out against the defense cuts while campaigning for vice president last fall, now says the sequester “is going to happen.” House Speaker John Boehner said the sequester is “as much leverage as we are going to get” against Obama in the tug of war over the bloated federal budget.
That is why Boehner convinced most Republicans to vote for a temporary debt ceiling increase in late January when the government was once again hitting its borrowing limit. Boehner reasoned that a fight over the sequester would yield better results than risking a credit default that would be blamed on Republicans if lawmakers declined to increase the federal debt ceiling. Indeed, credit agencies have not issued the same warnings over the sequester as they did over the debt ceiling.
The leverage comes from the fact that the sequester is already law, passed by Congress and signed by Obama. If lawmakers do nothing, the spending cuts happen. However limited the $85 billion in cuts for this year seem compared to the $1.3 trillion annual deficit, even someone pushing for more like Huelskamp admits it is a baby step in the right direction.
“To me that is a win we can have without doing anything,” he said. “We just have to buckle down and be ready for the folks that say it is the end of the world. But the real end of the world in political terms will be if we continue to rack up these massive debts and do nothing.”
These cuts will force programs to take hits, particularly the Pentagon, which will see a 7.3 percent reduction in its annual budget. Other agencies are looking at a 5.1 percent loss. Conservative groups have been warning about the threats to national security while liberals have been protesting the cuts to such agencies as the National Park Service, the National Institute of Health, and the Environmental Protection Agency.
Corporate, nonprofit, and agency lobbyists are descending on Capitol Hill trying to protect their piece of the federal government pie. The Defense Department sent a letter to Congress warning that the cuts will force them to furlough 800,000 civilian employees. “We are on the brink of creating a hollow force,” the letter warned.
The Navy must find an additional $4 billion in reductions this year, increasing the likelihood of reduced patrols, scaled back deployments, and delayed ship repairs. The National Parks Conservation Association has a three-page fact sheet predicting that the sequester will “bring national parks back to the days when rangers became an endangered species.”
Every agency has issued similar dire forecasts. “There are not many people running around Washington wanting to cut spending,” Huelskamp said. “There will be a lot of crying in Washington, but at the end of the day agencies will still get done what needs to get done even if the cuts go through.”
Obama, who nearly ignored the economy during his inaugural address, continues to give lip service to what he calls a “balanced approach” to deficit reduction. But there wasn’t much balance between tax increases and spending cuts in the fiscal cliff deal, and the White House has insisted that any changes to the sequester must include replacing some of the cuts with more tax increases. Boehner says that’s a nonstarter for Republicans.
Huelskamp acknowledges that the sequester will cause some companies and their employees to suffer, including several community hospitals in his district. In meetings with his constituents he has argued that taking a small reduction now may save the country in the future. He said most groups are willing to make the sacrifice as long as other groups dependent on federal dollars share the sacrifice.
Even with the cuts, Washington will likely spend more this year compared to last year. The sequester only reduces the rate of growth. Worse, the sequester largely exempts two of the biggest drivers of the nation’s debt: Medicare and Social Security. “If we can’t do these small minimal cuts that we are now talking about, how are we going to take care of the rest of the $1.2 trillion (deficit)?” Huelskamp asks.
Fifty-two years ago, Eisenhower gave his final speech before leaving the White House. In it, he warned about the dangers of massive spending, the acquisition of unwarranted influence by the military-industrial complex, and of a time when government contracts become a substitute for intellectual curiosity.
“We ... must avoid the impulse to live only for today,” he said in a speech that lawmakers debating the fate of the sequester should consider, “plundering, for our own ease and convenience, the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.”