Democrats Will Look to Gut the Sequester in Budget Talks

Treasury Secretary Jack Lew signaled the intention of the administration and Democrats to alter the automatic cuts in the budget known as the sequester that were agreed to by both sides in 2012.



“As independent economists and business leaders will tell you, these cuts have already slowed economic growth, just as the economy was getting traction,” he wrote. “The nonpartisan Congressional Budget Office has estimated that by the third quarter of next year, sequestration will have reduced real gross domestic product by as much as 1.2 percent, which means as many as 1.6 million fewer American jobs.”

The blanket cuts are a product of the 2011 fiscal stalemate and subsequent failed attempts to produce an alternative. The sequester is widely disliked but took effect anyways, shaving spending from nearly every piece of the federal budget, except funds for mandatory programs like Social Security.

Even some Republicans who favor cutting government spending see the sequester cuts as too indiscriminate.

“The real problems are that we’re continuing to spend money that we don’t have on things that we don’t need,” Sen. Tom Coburn said Sunday on NBC.

“There’s tremendous amounts of waste and fraud. We have to protect the promises made to American people. And we can do that, but we can do that spending a whole lot less money than we’re doing today,” he continued.

The next scheduled round of cuts will be even deeper.

The debt ceiling deal Congress reached this month funded the government at current levels and put off a decision on the sequester until January 15.

But their track record of resolving these issues isn’t great.

Lew, however, said the U.S. remains a stable “backbone of the global financial system.”


The problem is one of perception. What the Democrats see as “indiscriminate” cuts, Republicans see as a down payment on future savings. Sure, the GOP would not object to tweaking cuts to some agencies and departments to make sure vital services are funded — as long as they’re offset by cuts elsewhere. But the whole point of the sequester was that Democrats refused to cut just about anything except the military and wanted to raise taxes on the “rich” again. They will use the exact same strategy this time as well.

Democrats sent a clear signal by naming avowed socialist Bernie Sanders to the special budget committee. It means they will be extremely inflexible on entitlement reform. This doesn’t bode well for the fate of negotiations as the Republicans should make reform of Medicare and Social Security their number one priority.

In the end, it probably won’t matter. The atmosphere in DC is as toxic as it’s ever been and neither side seems willing to come down from the mountain to negotiate in any meaningful way. So we will get 4 months of chest thumping and posturing from both sides until the deadline looms again and another exercise in can kicking occurs.

You would think they’d grow tired of playing the same games.


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