With the election over, averting $109 billion in annual automatic spending cuts known as sequestration is now Washington’s top priority.
Absent a deficit-cutting deal by Jan. 2, many defense accounts will take a 9.4 percent hit, while nondefense accounts will get cut 8.2 percent. And while some military and Veterans Affairs Department accounts would be exempted from the cuts, the impact threatens to tip an improving but still fragile economy back into recession.
Federal employees face furloughs and possible reductions-in-force, and layoffs are also likely for employees at many government contracting firms.
Government services and effectiveness would suffer. This is no way to run an organization, let alone the largest government in the free world.
There is broad bipartisan agreement that sequestration is bad policy. But it looms because Congress and the White House failed to craft a bipartisan deficit reduction compromise over the past two years.
Republicans had hoped to stonewall the president and ultimately push him out of office so they could strike a deal with one of their own. It didn’t work.
So here we are with the same president, roughly the same Congress and the same problems. We are left to hope, as in the movie “Groundhog Day,” that eventually they will get it right.
Obama has pledged to reach across party lines to strike “a grand bargain.” The opposition — Senate Majority Leader Mitch McConnell, R-Ky.; Speaker of the House John Boehner, R-Ohio; and House Majority Leader Eric Cantor, R-Va. — must do the same. Their initial comments after the election offer only minimal promise. But the proof will be in the pudding.
Failure to make a deal on debt, taxes and borrowing will rattle financial markets, undermine America’s credit rating and pose potentially devastating consequences for the economy that underwrites U.S. national security — and the greatest democracy the world has ever known.