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January 30, 2013 8:02 pm
Republicans and Democrats agreed in 2011 to create a budget mechanism so damaging to both parties that it would force them to agree to a “grand bargain” – a mechanism known as the sequester. But it failed to recognise the changing political tides in Washington.
While the defence industry was once considered sacrosanct to Republicans, the reality today is that most conservative Republicans are shrugging their shoulders at the prospect of the $1.2tn in automatic spending cuts that take effect on March 1, and will slash the Pentagon’s budget by $600bn over 10 years.
Republicans have voted to have those cuts replaced. But the rise of the Tea Party means that the majority of the party stands behind any cuts in government as ultimately a good thing. Defence cutbacks are difficult for Republicans but something they can live with to stave off what they see as the biggest threat to the country: a potential fiscal crisis.
“The shift in the GOP over the last three years has been away from defence as a sacred cow and to slashing spending as a sacred cow,” says David Wasserman, an analyst at the Cook Political Report.
“I’m not sure if [defence lobbyists’] influence is that much less. I think it is a matter of Republicans having lost the battle on taxes and now want some wholesale structural changes in federal spending so that they don’t feel completely eviscerated in this fight.”
The top lobby group for the defence industry said that Wednesday’s economic growth numbers, which showed a contraction in the economy, was a potential “game changer” because it showed that the industry’s concern about the impact of the sequester was not just “alarmist”.
“It makes the situation a little less academic and abstract and points to the real consequences of bad policy,” said a spokesman for the Aerospace Industries Association.
The sequester was designed to dole out equal pain to both parties. But in reality it was seen as more favourable to Democrats because it spared most benefits to seniors and the poor.
Half of the cuts would be absorbed by the Pentagon and the other half by other government programmes that are seen as important to Democrats, such as the Environmental Protection Agency and education programmes.
But with Democrats unwilling to give in to Republican demands for the sequester to be replaced by cuts to Medicare and other entitlement programmes, and Republicans refusing to entertain tax increases to replace some of the cuts, the nation is marching toward implementation of the sequester as it was originally designed.
It means that the nation could, for the first time, begin to feel the real-life impact of all the failed negotiations over the years between President Barack Obama and Republicans on Capitol Hill to find a balanced approach to deal with the deficit.
And it raises the question of whether US-style austerity could shift national politics away from calls for spending reductions.
“In the new Republican party, spending in general is so much the issue that they really are not going to focus on where the cuts occur,” says Vic Fazio, a former Democratic congressman and lobbyist.
“Clearly a majority of the Republican conference was not interested in protecting defence spending or other spending from the mean axe.”
Mr Fazio claims the public wants spending cuts. But unlike in previous budgets that have played out over several years, voters will only now begin to see the impact of those cuts at work, including in reduced services, and likely cuts in the federal workforce.
“People [in government] would like to think that this is not their fault but my sense is that the real impact here that will be felt by sequestration is really the fault of the entire process,” Mr Fazio says. “Until you let the spending cuts be felt, people continue to think, ‘go ahead, cut’.”
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