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Sequestration process begins: Congress fails to reach agreement on budget fixes before deadline

The federal government careened into the $85 billion spending sequesters Friday, embracing some of the biggest budget cuts in American history — though it will take weeks for most of the pain to be felt.

Most lawmakers said they had hoped to avoid the across-the-board cuts but couldn't come to a consensus on how to do so. Senators defeated two last-ditch efforts Thursday and then House members skipped town for the weekend, leaving it to President Obama to begin carrying out the cuts, which he said he would do just before midnight.

He has scheduled a Friday morning meeting with congressional leaders to talk about the situation, but no action is expected.

In the short term, the White House has directed federal agencies to curtail travel, cancel any bonuses they aren't legally obligated to pay, and begin writing plans for how to furlough employees.

Those furlough notices will go out in coming weeks, and federal contractors and state and local governments will have to adjust to lower federal funding.

It's pain that few in Washington wanted. But lawmakers were unable to settle on a more palatable alternative, making the sequesters, in effect, a bad idea whose time has come.

"Sequester will kick in tomorrow. I think we all understand that," Sen. Bob Corker, Tennessee Republican, said Thursday. "We're going through this pain again due to lack of courage of the United States Senate to address the real issues of the day."

Mr. Obama chastised senators for failing.

"Instead of closing a single tax loophole that benefits the well-off and well-connected, they chose to cut vital services for children, seniors, our men and women in uniform and their families," he said. "They voted to let the entire burden of deficit reduction fall squarely on the middle class."

This fight differs from the spending battles of the past two years, when Congress would flirt with deadlines but always struck a last-minute deal to avert a government shutdown or debt default.

This time, the deadline is less gloomy. That's partly because the sequesters are not that big — less than 5 percent of the federal budget — and partly because the cuts will be rolled out slowly over the coming months.

The White House budget office on Thursday issued guidance telling federal agencies to begin planning furloughs and to cancel contracts they can get out of without paying big penalties. The memo also told offices to stop hiring to fill low-priority job openings, and to halt bonuses.

Some of the pain the administration has warned about may not be true.

Education Secretary Arne Duncan, speaking in the White House briefing room this week, pointed to a school district in West Virginia that he said was laying off teachers because of the sequester. But school officials there said it had nothing to do with the sequester.

White House press secretary Jay Carney on Thursday distanced himself from Mr. Duncan's claim.
"I am not personally in contact with individual school districts," he said.

Debt increase used up

The sequesters were set into motion by the 2011 debt deal, and were meant to be too painful for anyone to accept. They were part of a package that gave Mr. Obama the power to raise the government's debt ceiling by more than $2 trillion, in exchange for spending caps and the deeper sequester spending cuts.

That debt increase has been used up, but Congress and Mr. Obama are still fighting over whether to follow through on the spending cuts.

Lawmakers have repeatedly proposed alternatives to the sequesters, but Congress has never been able to muster enough support to pass any of them.

The House, run by Republicans, never even held votes this year, while the Senate waited until the last minute Thursday to vote on competing Democratic and Republican plans — and filibustered both of them.

The Democrats' bill would have canceled half of the cuts and replaced them with tax hikes and lower agriculture subsidies. It was blocked when it fell eight shy of the 60 votes needed to proceed.

Republicans' plan would have required all $85 billion in cuts to be made, but it would have turned over responsibility to Mr. Obama to decide where to cut.

"The goal here is twofold: one, to make sure the American people get the same amount of spending cuts that were promised to them in 2011, and two, to guarantee some accountability on the president's part so that those cuts are administered in a more intelligent way," said Senate Minority Leader Mitch McConnell, Kentucky Republican.

Mr. Obama said he was unwilling to shoulder responsibility for the cuts and threatened to veto the Republican plan, saying he would accept a bill only with tax increases included. The Republican plan fell 22 votes short of the 60 needed to move ahead.

In a sign of just how difficult it was to find agreement, 13 senators voted against both plans.

One of those was Senate Majority Leader Harry Reid, Nevada Democrat, who had to vote against his own party's plan as a parliamentary maneuver to be able to bring it back to the floor at a later date. The other 12 senators spanned the partisan divide — three Democrats and nine Republicans who voted against the GOP's cuts and their own party's tax increases.

Many of those Republicans were tea-party-style conservatives. Others were defense hawks who protested the trims to defense programs.

All three Democrats who voted against both plans are up for re-election next year.

"These bills were one-party solutions that would do nothing to solve our fiscal problems," said Sen. Mark L. Pryor, Arkansas Democrat and one of those who opposed both alternatives, criticizing Democrats for targeting farmers and Republicans for opening the door to cuts from entitlements such as Social Security.

The Congressional Budget Office crunched the numbers and said it was likely that neither the Republican nor Democratic plan would end up cutting as much as the sequesters would anyway.

The Democrats' plan would fall $7.2 billion short while Republicans' plan was too vague to be able to score, though CBO said if the president were given more leeway in what to cut, he likely would ax programs where the government was not going to spend the money anyway — meaning no new net savings from those cuts.

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