After the sequester: Why March 27 is even scarier

The March 1 sequester will almost certainly take place -- and negotiations to avoid a full-blown shutdown just a few weeks later are not looking particularly promising.

capitol dome and bills

It's almost certain that sequestration will take effect on March 1, as Congress and the Obama Administration have almost no time left to  reach a deal to prevent it. But less than a month later, the government could shut down altogether if lawmakers can't agree to extend the continuing resolution now funding its operations. (Stock image)

The debate over government spending is shifting from across-the-board cutbacks in agencies to a more sweeping focus on all federal accounts. With a March 27 deadline to extend a vital continuing resolution and prevent a shutdown of all operations, President Obama and Congress—who have tied themselves in knots in budget debates—face the challenge of finding new steps to loosen the policy stranglehold.

The latest challenge was put in place last September when both parties, on the eve of the election, agreed to kick the spending can down the road and retain existing levels for another six months. With the lawmakers’ continuing failure to resolve the fiscal issues, and with the voters’ decision to retain roughly the political status quo, the same decisions again are front and center. But this time, the players have shown that they are less amenable to deal-making.

Since January, leaders in both parties have been struggling over steps to avoid more than $80 billion in spending cuts and their consequences from the budget sequester that was scheduled to hit Pentagon and domestic discretionary accounts on March 1.

The sequester appears increasingly likely to go into effect. But the omnibus spending bill poses an even larger threat for already distressed federal employees and contractors. Instead of furloughs and spending delays, they may have to contend with a shutdown—and uncertain prospects for how and when the funding cutoff eventually will be restored.

The steps to resolve the latest conflict seem clear. Leaders of the congressional appropriations committee—who have a long tradition of bipartisan cooperation—could craft a compromise on overall spending for the next six months. Such a step also offers the convenient opportunity of relaxing the sequester, where the debate between the White House and congressional leaders had bogged down on political talking points.

House Appropriations Committee chairman Hal Rogers (R-Ky.) and Senate Appropriations Committee chairman Barbara Mikulski (D-Md.) offered good intentions and constructive proposals. "I am hoping that Congressman Rogers can pass this [spending extension] and that the Senate can get to work on it," Mikulski told reporters in late February. But it was far from clear that the once-powerful appropriators had the leverage or the clout to make a deal.

Only a couple months ago, the spending panels contended with unexpected obstacles before they finally passed a nearly $60 billion emergency spending bill for the victims of Hurricane Sandy, which caused huge devastation in the Northeast last October. But 179 House Republicans and 36 Senate Republicans voted against that measure—dramatic signs of the GOP’s aversion to once-routine spending, and the breakdown of the appropriators’ consensus-building approach.

Unique circumstances, in hindsight, led to last September’s controversy-free six-month approval of a continuing resolution for all spending. Neither party wanted another embarrassing showdown on the eve of the presidential election. So, they were willing to retain the spending levels that had been set in the August 2011 agreement to raise the federal debt ceiling.

Most Republicans went along last fall because they were hopeful that the election results would give them control of the presidency and strengthen their numbers in Congress. Despite opposition from conservative lobbying groups, conservative lawmakers pledged to support a short-term truce and were mostly silent during the routine debate.

But the dynamics of the spending debate have changed radically. Republicans failed to score their expected election gains. Congress and Obama averted the "fiscal cliff" with a New Year’s Eve deal that included mostly tax hikes. And, with the spending sequester scheduled to take effect, the $1.043 trillion baseline in effect has been reduced by tens of billions of dollars with an approach that most sides agree is irrational.

The timetable is short, not least because Congress is scheduled to start a two-week Easter recess on March 22. And, with Obama and congressional Democrats turning their attention to other domestic and overseas issues, there seems scant basis for optimism that wise heads will prevail on the spending showdown.

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