- - Tuesday, October 15, 2013

As the government’s partial shutdown enters its third week, the smell of an inconclusive deal is in the air, though one that has status quo written all over it.

After all the sound and fury over defunding Obamacare, or even delaying it, that issue has vanished for now as the attention turns to a grab bag of palliatives in the Senate to temporarily suspend the standoff and raise the debt ceiling for at least a few more months.

The intense negotiating battle going on behind closed doors is about how short or long the extension will be and what else each side gets in other provisions to seal a deal that can win a majority in both chambers.

Some of the options included repealing, or delaying, the tax on medical devices, tightening loose income rules on insurance subsidies under Obamacare and demands by Democrats to abandon the automatic sequestration spending cuts.

Clearly, Congress — including some of its most fire-breathing conservatives — appears ready for a deal. “We need to get an agreement and open the government back up,” says libertarian Sen. Rand Paul of Kentucky.

Even Sen. Ted Cruz of Texas sounds like he may be open to a timeout, telling reporters, “We need to see what the details are.”

If conservatives intend to hold out for a make-or-break deal, the automatic sequestration cuts must be at the top of their list of demands. Love it or hate it, it’s the only tool that has effectively kept a lid on spending.

The White House and the Democrats want to repeal it, because it’s cutting into their favorite giveaway programs, but a new Congressional Budget Office report shows that in the first 11 months of the 2013 fiscal year, outlays were $127 billion less than last year.

When CBO comes out with its final accounting for 2013, “overall federal spending may have fallen two years in a row for the first time since the end of the Korean War,” The Wall Street Journal reports.

Moreover, a new report by the Congressional Research Service shows the sequestration cuts have also been one of the most effective deficit-reduction weapons since the late 1980s.

“In nominal (i.e., not adjusted for inflation) terms, the Budget Control Act achieves the greatest amount of deficit reduction of any act since 1988,” the report says.

For nearly five years now, President Obama has been demanding that we raise income-tax rates to reduce the deficit (even though he really wants to increase spending). However, the sequestration provisions in the 2011 budget act are reducing the deficits entirely by spending cuts.

Mr. Obama keeps telling us the sweeping sequestration cuts — slicing about 5 percent from discretionary federal outlays (8 percent in defense) — are hurting our country.

However, a recent United Technologies-National Journal poll asked Americans, “Have you seen any impact of these cuts in your community or on you personally since they took place, or not?” The answer: 74 percent said they have seen no impact, while only 23 percent said they had.

Sure, a negotiated budget for the entire fiscal year that makes specific cuts in wasteful, duplicative programs that cry out for the ax would be far preferable, but that doesn’t appear to be in the cards, at least not in the short term.

Story Continues →