Bipartisan agreement on budget cuts: Scalpel is better than ax
WASHINGTON — Democrats and Republicans don’t agree on much these days, but there’s consensus on one major issue: The automatic budget cuts set to kick in late Friday are just plain stupid.
President Obama, House Speaker John A. Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-San Francisco) all have used the same derogatory image — a meat ax — to describe how the federal government will hack $85 billion from its budget this year.
The cuts, part of $1.2 trillion in reductions over the next decade, are across the board. With a few key exceptions, the budgets of almost every federal department, agency and program will be reduced by a set percentage this year: 7.9% overall for military and 4.6% for other spending, according to the Congressional Budget Office.
Budget analysts said there’s a much smarter way to reduce spending: using a scalpel instead of an ax.
A more targeted approach, particularly at the sprawling Pentagon, could produce the same level of cuts with less negative effect on military readiness and many government services, analysts said.
But it wouldn’t lessen the economic effects of removing that much government spending this year, including reduced growth and the loss of 750,000 jobs nationwide.
“You may still find you have to furlough some people, but … you can find real savings,” Gordon Adams, an American University professor and military budget expert, said about one-day-a-week furloughs facing most of the Pentagon’s 800,000 civilian employees. “You just have to be prepared to do it.”
But deciding exactly what to cut to reduce the $16-trillion deficit comes with risk of public backlash for bureaucrats and politicians, neither of whom want to be blamed directly for specific cuts.
On Thursday, Democrats and Republicans remained sharply at odds.
The Senate defeated a Republican proposal to give Obama more flexibility in deciding what to cut, something the White House has rejected because it argues the economy is too fragile for a major pullback in government spending.
Shifting authority to Obama also would make it more difficult for him to blame Republicans when the public starts feeling the pain from some of the automatic cuts, such as delays at airports because of furloughs of air traffic controllers.
A Senate Democratic plan to replace this year’s cuts with a mix of a new tax on millionaires and reductions only in military spending and farm programs also failed Thursday because of Republican opposition to raising taxes and reducing the cuts.
The stalemate has added to the gridlock in Washington that started the clock ticking on the automatic budget-cutting mechanism in the first place.
“If there was more flexibility from program to program or agency to agency, there would be less concern about cuts to critical services,” said Alex Brill, a research fellow at the American Enterprise Institute, a Washington think tank. “But one man’s critical service is another man’s wasteful government program.”
Nowhere is that more true than at the Defense Department, which spreads military contracts throughout the country. Lawmakers would howl if work on weapon systems in their districts was cut.
Adams, who oversaw the Pentagon budget during the Clinton administration, said it would be fairly easy to identify “$20 billion to $30 billion of stuff you just plain don’t need.” The total hit on Defense this year under the automatic cuts is $42.7 billion.
Production of some military hardware, such as the Joint Light Tactical Vehicle, the Ground Combat Vehicle and the F-35 fighter jet, could be significantly scaled back to avoid cuts elsewhere, defense budget experts said. And some duplicative military bases could be closed.
“The Air Force has been very upfront that they have over 20% excess capacity in their facilities. They are itching to close some of that,” said Todd Harrison, a senior fellow at the Center for Strategic and Budgetary Assessments.
“If [Pentagon officials] had the discretion, they could make these cuts in a way that would have a much smaller impact on readiness,” he said.
Taxpayers for Common Sense, a nonpartisan watchdog, issued a 35-page report last year listing more than $1 trillion in federal budget cuts over the next decade to “inefficient, ineffective or wasteful” programs.
The cuts included $1 billion from eliminating the Army Corps of Engineers beach replenishment program and $6.5 billion from rejecting a federal loan for a proposed high-speed train connecting Victorville, Calif., and Las Vegas.
“These were all low-hanging-fruit cuts,” said Steven Ellis, the group’s vice president. “We didn’t touch any entitlements.”
But Congress and the administration have little flexibility in making the cuts through the process known as sequestration.
Under the law, all “programs, projects and activities” must be reduced by a uniform percentage, according to the Congressional Research Service.
There are several major exemptions, including Social Security benefits, veterans programs and military personnel. Medicare is limited to a 2% reduction. Military bases can be closed only through a separate, complex process.
All that limits the ability of government officials to target the cuts.
An unsuccessful artifact of the deficit-reduction battles of the late 1980s and early 1990s, sequestration was revived in 2011 to force the White House and lawmakers to come up with a better deficit-reduction package.
“It was designed to scare the Congress and the president into making a deal, but apparently it was not fearsome enough to get around the philosophical inclinations of Republicans and Democrats,” said former Rep. Bill Frenzel, now a budget expert at the Brookings Institution.
In decrying the automatic budget cut process, the White House and Democrats also have argued that in many cases more flexibility would not offset the negative effect on the public.
“There’s nothing I could do to come up with a smarter way to do this,” said Education Secretary Arne Duncan, who oversees a budget of about $70 billion.
His department has two major pools of grant money — one for low-income children and one for those with special needs.
“Those two pots together — about $25 billion — dwarf anything else we do,” he said. “So the only choice I could make would be to hurt fewer poor children and help more special needs kids or do the opposite.”
At some agencies, it would be difficult to impose the cuts without furloughs regardless of flexibility. The National Oceanic and Atmospheric Administration, which oversees the National Weather Service, said it would have to furlough as many as 2,600 employees and leave an additional 2,700 positions vacant.
“The weather service has taken so many cuts over the last couple of years, it would be impossible to take any more,” said Daniel A. Sobien, president of the National Weather Service Employees Organization.
Snow-removal money has been cut in the Upper Midwest, forcing weather service employees to shovel their office parking lots. And with no money to hire someone to repair a leaking pipe in the Pueblo, Colo., office, employees had to fix it themselves, he said.
Ideally, Congress and the White House would replace the automatic cuts with a thought-out package of reductions that identify the true wasteful spending, analysts said.
“In essence the sequester treats all government discretionary programs as equal in value when we know they’re not,” said Brill, a former top aide on the House Ways and Means Committee. “It was designed to be stupid and arbitrary to force a better alternative.”
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