Washington Watch: Sequestration on the horizon

The U.S. economy is performing a little better than expected.

Employers added more than 200,000 jobs in November, and the unemployment rate is down to 7 percent, according to the Labor Department, which is the lowest it’s been since 2008 when the recession first hit.

The economy is still struggling overall, consumer confidence is fairly low, and many fear the healthy stock market is nearing a bubble of the wealthiest getting richer, while the lower income classes are improving very little.

The fortunes of 2014 remain a mystery.

But Congress is expected to play a key role in whether any forms of economic certainty and political stability are possible, which also does little to help consumer confidence.

All Beltway eyes currently are on the budget-negotiating group led by U.S. Rep. Paul Ryan, R-Wisc., and U.S. Sen. Patty Murray, D-Wash., and whether they will reach some compromise on government spending levels by their self-imposed deadline on Friday. Even if nothing is accomplished by the end of the week, the more important deadline is the Jan. 15 expiration of government funding that was decided upon to end the partial government shutdown in October.

So, time is of the essence, but some wiggle room remains.

And there is some limited reason for optimism. As the Politico publication reports, Ryan and Murray are “only a few billion dollars in budgetary savings away from a deal.” A few billion dollars out of overall spending levels of close to $1 trillion represent a relatively — very relative — small amount. But agreeing on the final few billion in spending levels and where exactly to make the cuts is easier said than done. So a lot of question marks remain.

The shutdown-ending compromise keeps total government spending at $986 billion through mid-January. The Democratic-controlled Senate has proposed spending levels at $1.058 trillion. The House GOP plan is to keep the sequestration-level cuts for total annual spending of $967 billion.

Many Republicans consider the sequestration cuts as a political victory, or at least leverage, toward reducing overall spending. The problem is that they oppose the harmful cuts made to defense spending through the sequester. So they would prefer shifting the cuts around more.

U.S. House Minority Whip Steny Hoyer, D-Md., said last week that he refuses to support any short-term spending fix to avoid another shutdown that keeps the $967 billion spending levels. Hoyer believes that the lower spending level is too harmful to jobs and government programs like Head Start early education and Meals on Wheels for the elderly.

Enter U.S. Rep. Steve Scalise, R-Jefferson, who chairs the staunchly conservative Republican Study Committee and has seen his influence continue to rise.

Scalise, Rep. Mick Mulvaney, R-S.C., and Rep. Jim Jordan, R-Ohio, are sending a letter Monday with about 20 other far-right House members to the chamber’s GOP leadership asking them to bring to a vote a one-year budget patch at $967 billion spending levels.

The same Politico piece calls the letter the “conservative resistance” to the Ryan-Murray budget talks. Scalise’s spokesman, though, is quick to contend the letter is not an effort to undermine the budget talks, but rather a backstop that’s used to avoid a shutdown if the budget talks fail.

The letter argues that Democrats are “desperate for another government shutdown” to distract from the “Obamacare” implementation issues.

The letter acknowledges the flaws with maintaining the sequester cuts to defense, but essentially makes the case that doing so is the lesser of two evils — better than agreeing to the additional spending that Democrats want.

“What has become clear is that Democrats are not interested in solving the problems created by the sequester: they are only interested in using the threat of the cuts as leverage to increase spending across the board, to increase our national debt, and to raise taxes and fees,” the letter states. “Or worse, they are interested in using feigned concern over national defense in order to distract attention from the disaster that is Obamacare.”

The problem remains, though, that Democrats are extremely unlikely to support keeping the sequester spending in place long term, and many Republicans oppose the way sequester cuts are applied.

So, if no deals can be made, then get ready for another blame game of who’s at fault for causing the next government shutdown.

Jordan Blum is chief of The Advocate Washington bureau. His email address is jblum@theadvocate.com.