Sequestration no longer the ‘bad policy’ bogeyman for Congress

The defense industry has now stared down the prospect of across-the-board spending cuts under sequestration for nearly 18 months — and they look more likely now than ever as the March 1 deadline approaches for the automatic cuts to occur.

{mosads}When the prospect of $1 trillion in across-the-board cuts to both defense and non-defense spending was included in the 2011 Budget Control Act, leaders in Washington said the cuts would never happen — the across-the-board reductions were “bad policy” to be used as a “forcing mechanism.” 

But lawmakers have increasingly become open to the prospect that the cuts will, in fact, occur in 2013, after a two-month delay was included in the New Year’s Eve “fiscal-cliff” deal. 

House Budget Committee Chairman Paul Ryan (R-Wis.) was the latest to suggest the cuts will take effect, predicting Sunday the cuts “are going to happen” and blaming Democrats for rejecting GOP proposals to stop them.

While the defense industry is still pressing for Congress and the White House to come together and find an alternative before the cuts take effect, the loud voices in Congress warning of sequestration’s devastation have — since November 2012 — largely gone quiet. 

Now the Pentagon and other federal agencies are actively prepping for the cuts with proactive measures. 

Here’s the timeline of how sequestration went from the impossible to the probable:

Aug. 1, 2011: Congress passes the Budget Control Act to raise the debt ceiling, setting up the prospect of sequestration should the supercommittee fail to agree on $1.2 trillion in deficit reduction. Some defense hawks oppose the measure, but the top Republicans on the House and Senate Armed Services Committees vote for it, as they are given assurances by leadership that sequestration will never happen.

Sept. 12, 2011: House Armed Services Committee Chairman Buck McKeon (R-Calif.) says he would rather see taxes go up than let the defense cuts under sequestration occur. He quickly walks back the comment, saying he opposes both scenarios.

Nov. 14, 2011: Defense Secretary Leon Panetta sends a letter to Sens. John McCain (R-Ariz.) and Lindsey Graham (R-S.C.) that warns sequestration would be “devastating” to the military. Republicans will echo Panetta’s words — and cite him — repeatedly in 2012.

Nov. 18, 2011: While Democrats initially were unhappy with the Budget Control Act — one lawmaker called it a “Satan sandwich” — a growing number begin to embrace the sequestration deal, despite the fact that the cuts would come to non-defense discretionary programs. Democrats say they got the better end of the deal because entitlements like Medicare and Social Security are mostly protected, while defense, historically a Republican priority, is on the hook.

Nov. 21, 2011: The supercommittee tasked with coming up with more than $1 trillion in deficit reduction fails, making sequestration law. The cuts still don’t take effect until Jan. 2, 2013, giving Congress more than a year to find a way to avoid them. President Obama says he will veto any bill that does not replace sequestration with “balanced” deficit reduction.

Dec. 14, 2011: McKeon introduces legislation to delay sequestration for one year, as it’s already becoming clear it will be difficult to get traction on avoiding the cuts until after the November 2012 elections. McCain introduces similar legislation in the Senate, but neither bill is embraced by party leadership and the measures go nowhere.

Jan. 26, 2012: Panetta introduces the 2013 Pentagon budget, which includes $487 billion in cuts over the next decade. GOP defense hawks are upset about those reductions, and vow not to let any more cuts happen through sequestration.

May 10, 2012: House Republicans pass a bill authored by Ryan that would do away with the first year of sequestration by making deeper non-defense discretionary cuts. The bill receives no Democratic support, but is used by Republicans to argue Obama has failed to act on the sequester while the GOP has.

May 18, 2012: A group of conservative Republicans and liberal Democrats join together to pass an across-the-board $1 billion cut to the Pentagon as an amendment on the House floor to the National Defense Authorization Act (NDAA), signaling that some Republicans support further cuts to the defense budget.

June 19, 2012: Lockheed Martin CEO Bob Stevens threatens to send out layoff notices to all 123,000 of his employees over sequestration days before the presidential election, setting off a partisan fight with the defense industry in the middle. The Obama administration gets defense firms to back off by agreeing to cover company costs under a law requiring notice for mass layoffs, prompting Republicans to accuse the White House of “bribery” ahead of the presidential election.

July 13, 2012: Mitt Romney attacks Obama on sequestration with an open letter in Virginia, saying, “Your insistence on slashing our military to pay the tab for your irresponsible spending could see over 200,000 troops forced from service.” He and other Republicans continue to criticize the president over the cuts to defense, citing industry studies that warn more than 1 million in job losses could occur under sequestration.

Oct. 23, 2012: In the third presidential debate, Romney accuses Obama of cutting the military through sequestration, prompting Obama to respond that sequestration “will not happen.” Republicans who have been critical of Obama over the cuts are surprised by the remark, accusing him once again of ignoring the problem throughout 2012 because of the election.

Nov. 12, 2012: The lame-duck session begins after Obama is reelected, but sequestration is barely mentioned in negotiations that focus on the expiring Bush tax rates. Defense firms and hawks in Congress begin to anticipate at least $100 billion in further Pentagon cuts if a grand bargain cannot be reached.

Dec. 18, 2012: Speaker John Boehner (R-Ohio) introduces “Plan B,” which initially does not address sequestration. A measure to delay the sequester cuts is eventually added, but the bill is withdrawn in the House due to lack of GOP support. At the same time, Graham — one of the most vocal opponents of sequester — says Boehner should “let it go through,” because a bad deal on entitlements is worse than the across-the-board cuts.

Dec. 31, 2012: As fiscal-cliff negotiations shift to Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.), sequestration at first appears to be left out of a deal on the Bush tax rates — but it’s ultimately included at the eleventh hour. The agreement delays sequestration for two months, pushing the deadline back to March 1.

Jan. 7, 2013: Boehner tells The Wall Street Journal that the willingness of Republicans to let sequestration happen was “as much leverage as we’re going to get” with Democrats and the White House. Boehner says Democrats were concerned about the cuts to domestic programs. Boehner also says he has support from defense hawks in his “back pocket,” but two defense hawks say they are opposed to using national security “as a bargaining chip.”

Jan. 10, 2013: The Pentagon announces it’s making pre-emptive moves due to the potential that sequestration will take effect in March, which include a hiring freeze, termination of civilian temporary workers, furloughs and other budget-slimming measures. The moves are a shift in tactics for the Pentagon, which did not begin planning for the cuts until the initial January deadline was just weeks away.

Jan. 23, 2013: The House passes a bill to extend the debt limit through mid-May, which separates the debt-ceiling and sequester deadlines. Sequestration is now the next major deadline on March 1, followed by the expiration of the continuing resolution on March 27.

Jan. 27, 2013: Ryan, the GOP’s budget guru, says that he thinks “sequester is going to happen.” He blames Democrats, accusing them of opposing GOP efforts to replace the cuts. With the sequestration deadline a little over four weeks away, there appears to be little momentum in Congress or the White House to stop the cuts.