Defense & National Security

Will Republicans raise taxes and chop defense to stop sequestration?

Will Republicans raise taxes and chop defense to stop sequestration?

Republican lawmakers have no time to nurse their wounds following Tuesday’s election: the coming week will bring their last opportunity to avoid the $1 trillion bundle of domestic and defense spending cuts known as sequestration, set to take effect in January.

The post-election “lame duck” session of Congress has long been the last best hope for ending sequestration, after months of partisan gridlock and stalling. Republican solutions for working around the cuts have focused on chopping entitlement spending and cutting the bloated federal workforce, while Democrats, led by President Barack Obama, have refused to countenance an option that doesn’t raise tax revenues.

In his first public statement following the election, House Speaker John Boehner (R-Ohio) seemed to indicate that Republicans would be first to blink in the lame duck standoff.

“We’re willing to accept new revenue under the right conditions,” he said, stipulating that tax increases must be balanced by real spending cuts and fiscal reform.

Boehner also made it clear that Obama needed to make the first move to avoid the coming fiscal crisis.

“Mr. President, this is your moment,” he said. “We’re ready to be led. Not as Democrats or Republicans, but as Americans.”

Mackenzie Eaglen, a resident fellow at the American Enterprise Institute who has closely followed the sequestration issue, said this was exactly what Obama had planned.

“Obama designed sequestration as a point of leverage,” she said, pointing to passages of Bob Woodward’s new book The Price of Politics, which traced the origin of the sequester mechanism to the White House. “This is really about taxes, and always was.”

With the ball in Obama’s court and Republican leadership beginning to entertain the long-shunned prospect of raising revenues, will the parties find compromise where previous efforts have failed?

Republicans made similar overtures during the 2011 Supercommittee negotiations that birthed the sequester, but Democratic tax proposals were too extreme, and the attempt at compromise ended in a punt.

Eaglen said the lame duck session could see another short punt for sequestration–a proposal that postpones the cuts for three or six months–or a partial solution that gets rid of its most unpleasant aspects. The disproportionate weight of the sequester in the first fiscal year of cuts (enough reportedly to cause chaos in the Defense Department and plunge some military-dependent cities back into recession) and the inflexible, off-the-top nature of the cuts are the worst elements of the mechanism for lawmakers, Eaglen said.

“Take away either of those and Congress will vote for more defense cuts,” she said.

But if Obama fails to lead a real bipartisan effort to avoid sequestration and the Republican-led Congress maintains its hard-line stance in the ranks against new taxes, the deadlock may continue all the way up to New Year’s.

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