A curious coalition has come together to petition the Senate leadership of both parties to work on a bipartisan deal to avoid the sequester, the automatic cuts to defense and discretionary spending. Six senators, three in each party, wrote the letter to Harry Reid and Mitch McConnell. It’s mostly generic, but the identity of those involved does say something about what could come in the lame duck session.
The Republicans are the triplets who barnstormed the country over the past couple months to warn about cuts to the defense budget – John McCain, Lindsey Graham and Kelly Ayotte (Joe Lieberman’s All About Eve-like replacement). And this makes sense in the context of the letter (which I’ll post in full on the flip) focusing on defense cuts, invoking the name of Defense Secretary Leon Panetta in particular to hype up the national security challenges at play. However, the letter concludes by saying “Based on this, we are committed to working together to help forge a balanced bipartisan deficit reduction package to avoid damage to our national security, important domestic priorities, and our economy.” The word “balanced” is often used by Democrats, trotted out to connote a deal that involves taxes. So the assumption here is that taxes would be part of whatever solution comes out of a bipartisan deal.
That’s obvious from a Democratic side, but three Republicans are on the record with that, which is newsworthy.
The Democrats who signed the letter include two members of the Senate Armed Services Committee, Chairman Carl Levin and Jeanne Shaheen (Ayotte’s counterpart in New Hampshire). And then Sheldon Whitehouse (D-RI), who isn’t on that committee, added his name. Whitehouse is significant because he has a very particular set of ideas about deficit reduction and the fiscal cliff. First, he organized the pledge of 29 Democrats, including Reid and Chuck Schumer, opposing any changes to Social Security as part of this deficit reduction scheme. That’s certainly a real concern, but no language about entitlements appears here.
Whitehouse also discussed a series of fiscal cliff options with me in June, where he brought up a wide range of options, all the way from adding a carbon tax to including the Buffett rule (which he authored) in the package. He has also endorsed letting all the Bush tax cuts expire and coming back after January 1 with a new set of tax cuts, putting Republicans in the position of having to either reject them and let rates sit higher or accept them.
So Whitehouse has been fairly nimble in this debate, and this letter doesn’t lock him into much. It basically says that the sequester would be a bad idea, and that something should replace it. The letter harps on the defense side, but also lays out the danger of the cuts to the discretionary budget, and promotes a “balanced” solution.
I don’t know who’s leading who here, but certainly Whitehouse has put himself in the center of the discussion, armed with a quiver of ideas. And the Defense Triplets are desperate enough to lunge at any one of them. Short of canceling the sequester entirely, this isn’t a bad place to be.
Here’s the full letter:
Dear Majority Leader Reid and Republican Leader McConnell:
We face a critical challenge in the next few months: balancing the need to reduce the deficit with the need to safeguard important priorities, particularly protecting our national security, vital domestic programs, and our economic recovery. We believe it is imperative to enact a bipartisan deficit reduction package to avoid the severe economic damage that would result from the implementation of sequestration. Any deficit reduction package should be long term and should provide as much certainty as possible for businesses and consumers.
The Congressional Budget Office has already warned sequestration in combination with the expiration of current tax policy could send our fragile economy back into a recession and raise unemployment above 9 percent, and the administration agrees that sequestration “would be deeply destructive to national security, domestic investments, and core government functions.” Failure to act to address the debt would result in sequestration taking effect in January 2013 with significant detrimental impact on our fragile economic recovery. According to a report done for the Aerospace Industries Association, if sequestration is allowed to occur in January, the nation will lose approximately 1 million jobs because of defense budget cuts and 1 million jobs because of domestic cuts in 2013.
Make no mistake about the devastating impact of sequestration. According to Defense Secretary Leon Panetta, sequestration would leave our nation with its smallest ground force since 1940, smallest number of ships since 1915, and smallest Air Force in its history, and “would inflict severe damage to our national defense for generations.” The indiscriminate across-the-board defense cuts scheduled to start this January would result in a 9.4 percent reduction to defense discretionary funding and a 10 percent reduction to defense mandatory spending programs. The administration reports that “sequestration would result in a reduction in readiness of many non-deployed units, delays in investments in new equipment and facilities, cutbacks in equipment repairs, declines in military research and development efforts, and reductions in base services for military families.” Specifically, the Army would see a $7 billion reduction in operations and maintenance (O&M) funding, and the Navy and Air Force would lose another $4.3 billion each in their O&M accounts.
In addition, sequestration’s impact will be felt beyond the Department of Defense. On the non-defense spending side, the administration reports that sequestration would “undermine investments vital to economic growth, threaten the safety and security of the American people, and cause severe harm to programs that benefit the middle-class, seniors and children.” The National Institutes of Health would face a $2.5 billion cut and “would have to halt or curtail scientific research, including needed research into cancer and childhood diseases.” The Centers for Disease Control and Prevention would see a $464 million cut, and states and local communities would lose billions in federal education funding for Title I, special education State grants, and other programs.
Based on this, we are committed to working together to help forge a balanced bipartisan deficit reduction package to avoid damage to our national security, important domestic priorities, and our economy.
Sequestration will endanger the lives of America’s service members, threaten our national security, and impact vital domestic programs and services. Meeting this challenge will require real compromise, and we do not believe that Congress and the president can afford to wait until January to begin to develop a short term or long term sequestration alternative. All ideas should be put on the table and considered. Accordingly, we urge you to press between now and November the Congressional Budget Office and the Joint Committee on Taxation to score any bipartisan proposals forwarded to them so that Congress may evaluate these plans.
We believe it is important to send a strong signal of our bipartisan determination to avoid or delay sequestration and the resulting major damage to our national security, vital domestic priorities, and our economy.