Shock or overwrought? After doomsday predictions, budget cuts may fizzle

Published: Wednesday, March 6 2013 10:35 a.m. MST

In this March 4, 2013, photo, The White House is seen through a chain-link fence where the inaugural reviewing stand once stood in Washington. z Monsivais)

Pablo Martinez Monsivais, Associated Press

WASHINGTON — The automatic budget cuts known as the sequester took effect on Friday, with President Barack Obama shifting the blame to Republicans.

"Let's be clear: None of this is necessary," Obama told reporters at the White House. "It's happening because of a choice that Republicans in Congress have made. We shouldn't be making a series of dumb, arbitrary cuts to things."

The charge that Congress crafted the sequester is part of an ongoing effort by the White House to blame Congress, even though Bob Woodward argued in his book "The Price of Politics" that the proposal originated in the White House.

Woodward, Jim Vandehai and Mike Allen argue in Politico, "makes plain that sequestration was an idea crafted by the White House. Obama personally approved the plan and later signed it into law. Woodward was right, several congressional officials involved in the talks told us."

The budget fight stems from 2011, when Congress and the president agreed to raise the national debt ceiling but, under pressure from bond raters leery about spiraling debt, agreed to reduce spending.

Congress passed what became known as the sequester on Aug. 2, 2011, locking in $2.4 trillion in spending cuts over 10 years. Four days later S&P downgraded the U.S. credit rating for the first time in history, dropping it from AAA to AA+.

The downgrade reflected frustration at the bond rater that only $2.4 trillion was cut, shy of the $4 trillion S&P hoped for, according to a Bloomberg.com report at the time.

Woodward's reporting made clear that neither side expected the automatic budget cuts to actually take place. The device was intended to be a prod to force both sides to come to an alternate agreement.

The conflict between Woodward and the White House escalated when Woodward went to the pages of the Washington Post to accuse the administration of "moving the goal posts" on a solution to the standoff.

That conflict simmered through the runup to Friday's deadline, with White House advisor Gene Sperling telling Woodward in an email that he would "regret" making that assertion. By Sunday, both men seemed anxious to move on, The Hill reported.

Senior White House adviser Gene Sperling told NBC's Meet the Press on Sunday that Republicans would eventually have to give way on tax increases.

"As this pain starts to gradually spread to communities," Sperling said, "more Republican colleagues who are concerned about this harm to their constituents will choose bipartisan compromise on revenue-raising tax reform with serious entitlement reform."

"They'll choose this bipartisan compromise over what is an ideological position that every single penny of deficit reduction going forward must be on the middle class or seniors or children, and that there can't be one penny that comes from closing loopholes or tax expenditures," he added.

While Sperling served as White House spokesman Sunday, a number of key Republicans seemed confident on Sunday talk shows that the trimming would be sustainable.

Senate Minority Leader Mitch McConnell, R-Ky., told CNN on Sunday that the modest 2.4 percent haircut to federal spending was roughly comparable to the hit on payroll taxes that most Americans absorbed in January.

"This modest reduction of 2.4 percent in spending over the next six months is a little more than the average American experienced just two months ago, when their own pay went down when the payroll tax holiday expired," McConnell said.

New Hampshire Republican Kelly Ayotte told ABC on Sunday that any compromise on the spending cuts would need to occur within a larger fix to entitlement spending problems.

“This sequester has to be dealt with within existing spending and alternative cuts, and we need real entitlement reform and real tax reform," Ayotte said. "That’s what we need for the country if we’re going to drive down our debt and also be focused on economic growth.”

House speaker John Boehner echoed Sen. Ayotte on NBC's Meet the Press.

“Every American, in these tough economic times, has to find a way to balance their budget. They've got to make choices,” Boehner said. “They expect Washington to live within its means and to make choices as well.”

He said, “It's time for the president and Senate Democrats to get serious about the long-term spending problem that we have.”

Eric Schulzke writes on national politics for the Deseret News. He can be contacted at eschulzke@desnews.com.

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