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Tom Block: Sequester is a Republican win


This column appears courtesy of KY Forward and is written by Tom Block

The Republicans in Washington have not been on a winning streak recently. Of course in the November election they failed to defeat a President they thought was very unpopular, they failed to capture the Senate, an outcome many thought likely as 2012 began, and while keeping the House they had a net loss of seats. Then came the fiscal cliff and specifically the Bush tax rates that were set to expire. No way, no how were they going to raise taxes on anyone. But when faced with the harsh reality that sticking to that pledge they would in fact be increasing taxes on everyone; they compromised and got a victory but called it a defeat. They in fact got the Bush tax rates made permanent for 99% of all taxpayers; but somehow it became a Republican loss.

Now the nations faces sequestration, the fiscal straightjacket that Congress created to force some progress to reduce the deficit. Most Democrats thought that Republicans, faced with large cuts in Defense spending, would come to the President, Nancy Pelosi and the Senate Leadership begging for a compromise. But to the surprise of many I think the Republicans are determined to get a clear win. They are going to insist on real budget cuts, even if it means cuts to defense. As one pro-defense Republican told me, if the cuts are fully implemented, Department of Defense spending will still be at levels we had fighting two wars back in 2008.

There are undoubtedly some Republicans who have been the staunchest allies of the Defense Department who would fold their cards pretty quickly to get Defense spending back to current levels. However, there are other Republicans who really believe that no enemy threatens the US as much as the runaway deficit. These Republicans acknowledge that they can’t ask for entitlement cuts, domestic spending reductions; but keep the defense spending at current levels.

I often tell people that on some issues the political spectrum is more like a circle than a straight line. There are times when conservatives and liberals come to the same position for different reasons; and I think that is the situation with respect to sequestration. Conservative Republicans are not happy about the Defense cuts; but are willing to accept them as part of a broad spending reduction package. Liberal Democrats don’t like the extent of the domestic spending cuts; but believe that this process may be the only way to reduce the Department of Defense budget. Hence the circle, both sides of the political spectrum allowing sequestration to take place, but for different reasons.

The next big test for Republicans will be February 12th, when the President delivers the State of the Union. It is the ultimate bully pulpit. The President will be speaking from the lectern in the Republican controlled House chamber. He will have Speaker John Boehner, the highest elected Republican in government today, sitting right behind him. It will be a dramatic moment to address the budget issues that he ignored in his Inaugural address. Two weeks before the sequestration deadline it is hard to see how he can avoid the issue.

The President is likely to renew his call to reverse sequestration with a combination of tax increases and budget cuts. But the Republicans have sent out a clear message that they are done, in Kentucky we might say one and done, with tax increases for 2013. After aligning itself with the Tea Party, after running a national campaign on the urgent need to get spending under control, the Republicans have the opportunity to cut $1.2 trillion in ten years. No Bowles/Simpson, no grand bargain, just cuts.

After two years of rhetoric finally some cuts. Hence sequestration could finally be a win for Republicans. Congratulations GOP!

Tom Block is a public policy consultant who had a 21-year career with JP Morgan Chase where he served as head of government relations in New York City and created a Washington research product. He also created the bank’s EU Government Relations program and developed a new position as U.S. Government Policy Strategist focusing on how U.S. government policy impacts capital markets. He has an extensive government and banking background, has worked on political campaigns and as a speech writer. He is a family trustee of Bernheim Aboretum in Louisville and holds a bachelor’s degree in political science from American University. He and his wife make their home in Kentucky. He is a regular contributor to KyForward. Contact him at [email protected].

Photo: United States Capitol