How Did We Get Here?

By Jay Friess
Editor

Sequestration – the set of automatic federal budget cuts that threaten to slash defense spending by as much as 10 percent – has not gone away. Congress merely deferred the start of the cuts until March 1 in hopes of reaching a compromise.

After all the falderal over the federal debt ceiling, the super committee and the fiscal cliff, the threat of sequestration is still aimed squarely at the local economy surrounding Naval Air Station Patuxent River and the Naval Air Systems Command (NAVAIR). Thousands of workers in St. Mary’s County face the prospect of losing their jobs to cancelled contracts or may endure painful weekly furloughs as civil servants if Congress does nothing more.

The noises coming out of Washington aren’t inspiring much hope for a responsible resolution. Perhaps it is instructive to recall how we got this far.

The Sequestration Timeline

Nov. 2, 2010 – Riding a popular sentiment of disappointment with President Barack Obama’s administration and the energy of the Tea Party movement, the Republican Party regained control of the House of Representatives, picking up 63 seats. The freshmen representatives forced the GOP to take a harder line on federal debt.

Summer 2011 – As the federal government approached its legal debt limit, projected to occur Aug. 2, 2011, Congressional budget hawks rejected two compromise measures – a “Grand Bargain” forged by the Obama administration and House Speaker John Boehner (R) and a “Plan B” developed by Boehner and Senate Majority Leader Harry Reid (D). However, on July 31, 2011, the White House announced that Congress had reached a deal.

Aug. 1, 2011 – The House of Representatives passed the Budget Control Act of 2011 by a vote of 269–161. Of those who voted for it were 174 Republicans and 95 Democrats, while 66 Republicans and 95 Democrats voted against it.

Aug. 2, 2011 – The Senate passed the Act by a vote of 74–26. Six Democrats and 19 Republicans voted against it. President Obama signed the act shortly after it was passed. The Act created the Joint Select Committee on Deficit Reduction, known popularly as the “super committee,” and charged it with producing legislation by late November that would decrease the deficit by at least $1.2 trillion over ten years. If the super committee failed to act, the law ordained automatic across-the-board cuts, known as “sequestrations,” to split the $1.2 trillion evenly between defense and domestic spending, beginning on Jan. 2, 2013.

Nov. 21, 2011 – The super committee failed to act. The group released a statement, saying, “After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline.” The group would not formally disband until Jan. 2012, but no more hearings were held.

2012 – Nothing. With sequestration scheduled to hit in Jan. 2013, the defense industry repeatedly warned the 112th Congress that automatic budget haircuts of 8 – 10 percent could disrupt supply chains and kill production capacity, not to mention kill contracts and cause mass unemployment. However, Congress did not pass legislation to mitigate or eliminate the Budget Control Act’s time bomb.

Jan. 1, 2013 – During a 2 a.m. vote, the Senate passed the American Taxpayer Relief Act of 2012 by a margin of 89–8. The House passed the bill without amendments by a margin of 257–167 at about 11 a.m. that same morning. Eighty-five House Republicans and 172 Democrats voted in favor while 151 Republicans and 16 Democrats were opposed. The Act restored many popular tax breaks that had expired or were due to expire, and it pushed the start of sequestration back to March 1.