By Alexa van Sickle, Assistant Editor
As the presidential campaigns take centre stage, in Washington the conventional wisdom on preventing $1.2 trillion automatic across-the-board cuts (‘sequestration’) is that Congress and the White House will strike a deal on an alternative debt-reduction plan in the so-called ‘lame duck’ legislative session – after the election and before the new year. But as the deadline approaches, this no longer looks like a certainty.
With half of the impending cuts slated for the defense budget, the US defense industry is feeling the tension. In July, Lockheed Martin CEO Robert J. Stevens testified before Congress that ‘the very prospect of sequestration is already having a chilling effect on the industry’. According to a Bloomberg Government report, Lockheed Martin, Boeing and General Dynamics spent $10.3 million on lobbying and spreading awareness on the possible effects of sequestration in the first quarter of 2012.
It is unclear how much effect that has had on the fundamental deadlock in Washington: both parties already know that sequestration is ‘bad policy’, but cannot agree on a balanced debt-reduction plan. On 13 September, the Republican-controlled House of Representatives passed their solution to the problem – the National Security and Jobs Protection Act – calling for a $19 billion reduction in discretionary spending. Democrats are likely to stop any bill detailing defence-only exemptions that doesn’t raise taxes and instead makes cuts to Medicare, infrastructure investment, and food stamps.
‘My hope is that following the presidential election, whatever adults remain in the two political parties will make the compromises necessary to put this country back in order’, said former defense secretary Robert M. Gates at an event at the Center for Strategic and International Studies on 17 September.
However, some feel that sequestration is not out of the question. Kevin Brancado, a defence analyst at Bloomberg Government, said that sequestration is now ‘more likely than not’. Mackenzie Eaglen, an American Enterprise Institute scholar, is also skeptical: ‘Removed from immediate electoral concerns, the thinking goes, Congress will be freed to act decisively, and the winning side in November will emerge with a clear mandate to avoid sequestration through their preferred method – the Democrats, by raising taxes and the Republicans, by cutting entitlements.’
But the reality, said Eaglen, ‘is that no side is likely to emerge with a clear mandate or large majority. All of the same fights and dug-in positions will still be the same after the election as they are today.’
Trying to assess which party has the most to lose politically if sequestration were to go ahead does not make the picture any clearer:
‘If sequestration kicks in, it will be seen as yet another sign of the intractable gridlock in Washington’, says Charles Kupchan, of the Council on Foreign Relations (CFR). ‘Democrats and Republicans will try to blame each other, but on balance, it will do more harm to Republicans than Democrats. Americans increasingly see Republicans as obstructionists who are taking a “slash and burn” approach to federal spending.’
CFR President Emeritus Leslie H. Gelb adds that it will also be more damaging to the GOP because ‘[they] won’t be able to escape their initial strong support for the idea – the record on this is quite clear’.
But this does not necessarily mean that the Republicans in Congress, who want to avoid defence cuts, will blink first. Austin Wright reported on Politico that a new book by Bob Woodward (part of the Pulitzer Prize-winning investigative team that broke the Watergate scandal) could bolster the Republicans’ strategy of blaming Obama for the impending cuts. While it is true that Republicans supported the bill containing sequestration, Woodward’s The Price of Politics makes it clear that the idea for the spending cuts originated in the White House, not in Congress: ‘President Barack Obama’s top deputies believed the prospect of massive defense cuts would compel Republicans to agree to a deficit-cutting grand bargain,’ Wright wrote.
Sarah Binder, senior fellow in government studies at the Brookings Institution, said in a live chat on 12 September that ‘neither party wants to accept a half-loaf compromise – they want a full loaf deal more favorable to their party after the elections’. If Romney wins, she explains, the GOP is likely to ‘hold out’ until Romney takes office.
John McCain is pessimistic that lawmakers will reach a deal without Obama’s involvement. But Democrat Senator Carl Levin, chair of the Senate Committee on Armed Services, is more confident, and has revealed that talks to head off the cuts are under way.
But these talks might not lead to a solution just yet. ‘I think it is unlikely there will be a grand bargain in the lame duck sessions’, says Binder. ‘I suspect that neither party, though, wants to go over the fiscal cliff, so some sort of kicking the can down the road to buy time is probably what we’ll see to push the tough votes and choices into the new year.’
A recent IISS Strategic Comment notes that any defence-related provisions and changes are likely to be far more gradual than defense contractors fear. Nevertheless, a delay into the new year won’t reassure the US defence industry – which still doesn’t know if it should prepare for the worst.