When the much-anticipated White House report landed in inboxes on Friday afternoon, budget watchers were anxious to pore through the 400 pages detailing more than 1,200 budget accounts to understand just how painful sequestration might be next year.
No such luck. With roughly two months before Congress heads into a lame-duck session, the White House instead opted to crank up the pressure on Congress by providing few new details on the ramifications of sequestration.
“I didn’t learn anything new,” said William Hartung, a defense analyst at the Center for International Policy. “In that sense, it probably doesn’t advance the ball in terms of resolving the problem. It’s still sort of playing chicken: Who’s going to budge first?”
The White House showed on Friday that it’s not planning to unravel the defense cuts, until Congress comes up with a bigger plan to reduce the deficit by $1.2 trillion or face automatic cuts on Jan. 2, half from defense, half from non-defense spending, as mandated by the Budget Control Act. And this hard-line stance sets the stage for the end-of-the-year negotiations, signaling that President Obama is not going to move from his position or cave to Republican demands as he did in the lame duck in 2010—no matter how loud the Republican defense hawks scream about the cuts in swing states.
The report gives the Republicans on the Hill and on the campaign trail no new political ammunition to use against the Obama campaign. All it does is continue to highlight the deeply destructive nature of the cuts, which the administration repeatedly has called “bad policy,” before it volleys the problem back to Capitol Hill.
“This will dramatize the fiscal cliff, at least the sequester part of it, for most Americans,” said Steve Bell, senior director of the BiPartisan Policy Center’s Economic Policy Project. “If you say to them that some crumbling bridges aren’t going to be fixed or some cancer research center is going to be impacted in their hometown, then they’ll pay attention.”
In a conference call, Obama administration officials echoed the report’s narrative by insisting there is still time to prepare for sequestration should it take effect. Senior administration officials urged Congress to instead spend its energy reaching a compromise to reduce the deficit and avoid the cuts altogether. Should Jan. 2 arrive sans compromise, officials said they would almost certainly have to adjust the preliminary numbers described in the report, which outlined 9.4 percent reductions to discretionary defense accounts and 8.2 percent cuts to nondefense discretionary accounts.
“Hopefully, as people see this report today and they see the consequences of sequester going in place, that will move the Republicans toward compromise,” a senior administration official said. “But without compromise, today's report gives us a window into what our future might be like.”
Republicans, predictably, were outraged. Senate Armed Services ranking member John McCain, R-Ariz., Sens. Lindsey Graham, R-S.C., and Kelly Ayotte, R-N.H., blasted the White House for failing to provide details on cuts to accounts down to the program, project and activity level. “This disappointing report provides virtually no new information,” they said in a joint statement. “With sequestration less than four months away, the president’s decision to ignore the specific intent of this law leaves Congress, the Department of Defense, defense suppliers, and the American people in the dark.”
House Armed Services Chairman Buck McKeon, R-Calif., said the report shows a “shocking lack of planning” and blamed the commander-in-chief, Obama, for apparently being willing to leave the military without resources or strategy. “Bottom line – the administration failed to comply with both the letter and the spirit of the law,” McKeon said.
With Republicans still hounding the administration for details, Democrats seized upon that momentum from the vague—but stark—report to make Republicans appear even more entrenched and deaf to the defense establishment's warnings. “We started down the path to sequestration when a group of Congressional Republicans held the U.S. economy hostage during last year’s debt ceiling debate,” House Armed Services ranking member Adam Smith, D-Wash., said. “Although we must prepare for the unfortunate possibility of an actual sequester, it is all the more important that we work together to avoid that occurrence. I stand ready to work with my colleagues in Congress to pass a big, balanced, long-term solution that includes new revenue as well as new cuts.”
Senate Armed Services Chairman Carl Levin, D-Mich., also promised to continue working with members of both parties to avoid “destructive and unnecessary” sequestration that would harm national security.
Still, the administration has little incentive to show all its cards at this point. With three and a half months remaining until the cuts are slated to take effect, there is still time—albeit limited— to strike a deal. Starting to plan how to mitigate that worst-case scenario is a waste of time and energy, an administration official said Friday, referring to initial hesitations about providing this particular report.
Providing specific details on how the White House might slash defense would also open the door to political attacks-- like the ones by Republican presidential candidate Mitt Romney and his running mate, House Budget Committee Chairman Paul Ryan, R-Wis., who claim Obama actually wants the $1 trillion cut from the military budget.
From a political standpoint, the Obama administration had already outlined the smartest exemption: Military personnel accounts. While sequestration means $55 billion would be taken out of the defense budget next year, the troops will keep their pay and benefits. Veterans will keep their health care and benefits, too. The report confirms this exemption will come with a cost to other Pentagon discretionary accounts, as everything from weapons procurement to shipbuilding, could be cut up to 9.4 percent.
With elections looming, the stakes are getting higher for both sides. The White House made clear it’s not budging-- even as the GOP presidential ticket continues to blame Obama for “his” reckless defense cuts, in an attempt to win over voters in defense-heavy battleground states. But with Congress’s approval rating near rock bottom, members certainly don’t want to be seen as the ones who sent the economy over the fiscal cliff, either. Nor do they want to be seen as protectors solely of the defense industry while other discretionary spending suffers from deep cuts.
This is a political dance that won’t get resolved until after the election. Friday’s report was just the White House's latest chess move.