After riding high on the fiscal cliff, President Obama is down low on sequestration.
If one believes the Chicken Littles who dominate the news coverage in Washington, D.C., Armageddon is looming.
First it was the fiscal cliff that supposedly threatened to take this country over the side. That was averted when President Obama and Congress reached a compromise agreement on a tax hike package that dramatically increased the amount high-income families will pay.
Now it's sequestration, a package of automatic budget cuts that will take effect on March 1 if President Obama and Congress do not agree on an alternative.
President Obama calls it a "meat-cleaver approach," and he's close enough in his description to justify proposing alternative reductions.
The real problem with sequestration is not the amount of money that will be cut from domestic and military discretionary spending; it's the way it will be cut — across the board. That's a ham-handed way of doing business. It would be preferable for budget officials to establish program priorities, cutting some while leaving others alone.
Despite that reality, it's our view that opponents of sequestration are exaggerating its impact.
Sequestration involves a reduction of roughly $85 billion in spending between March 1 and Sept. 30. That's a lot of money by any measure. But considered in the context of $3.6 trillion in overall federal spending, it's roughly 5 cents on the dollar.
So, really, is the sky falling?
The plan calls for a 5.1 percent cut in domestic discretionary spending that has skyrocketed during the first four years of the Obama presidency. Since many federal agencies have dramatically larger budgets than they had four years ago, the cuts should be manageable.
It's a slightly different story with defense, which is slated for a 7.3 percent cut. The defense department already has endured a series of budget reductions, and outgoing U.S. Defense Secretary Leon Panetta has warned that further cuts will harm military preparedness.
That sounds like a good reason for President Obama and House Republicans to find alternative cuts. The essential problem, however, is that Republicans, concerned about $1 trillion annual deficits and $16 trillion in national debt, believe spending reductions are a fiscal necessity. President Obama emphatically disagrees, barely mentioning the debt issue in his State of the Union speech because he now disputes the notion that it is even a problem.
With sequestration scheduled to take effect automatically — the ironic result of an administration proposal that Congress accepted — the GOP has the political leverage that Obama had in late December when he forced Congress to approve higher taxes.
Figuring that distasteful budget cuts are better than no cuts at all, House Republicans are prepared to let sequestration take place unless Obama is willing to discuss alternative cuts. In fact, they desperately want him to propose alternative cuts.
So far, it's a standoff that's been mischaracterized as foolish stubbornness on both sides. It's not. It's a principled dispute over a fundamental issue — federal spending.
It would be better if Obama recognized, like the Republicans did on the fiscal cliff issue, that he's at a political disadvantage and propose a more palatable budget cut package than sequestration affords. Sometimes it's better to concede a point one day and come back to fight another day.
That does not appear to be in the cards, but there's still time. The GOP didn't deal with Obama on the fiscal cliff until the last minute. The same thing can happen on sequestration. Even if it doesn't, it's not near the problem some suggest.