...spending cuts begin this week
What IS the sequester?
Beginning March 1, some $1.2 trillion will be cut from federal spending, with the cuts spread out over a decade. Half will come from defense, half from everything else - except for, ironically, the biggest driver of federal spending of all, entitlements. Those won't be touched.
Polls show White House support
President Obama knows he's got the American people on his side here; a USA Today survey last week showed that most Americans favor Obama's "balanced approach" of cutting spending carefully, not indiscriminately.
A separate Pew survey also said that just 22% of Americans call themselves Republicans these days; the White House knows the GOP brand is tattered, and full of internal strife -- so it's going to hang tough here.
Sequester was White House idea
The irony here - and it's a terribly cynical one - is that the White House position on the sequester is one of the biggest flip-flops ever. The president said in his State of the Union that it's quote - a really bad idea - yet when under questioning his slick PR man Jay Carney has admitted quote "it was an idea that the White House put forward."
The administration now says it was designed to be such a horribly bad idea that no one in Washington would allow it to happen.
One good thing - and one stupid thing - about the sequester
Good thing: No one seems to mention that the sequester might prevent another downgrade of the U.S. government's long-term credit rating. S&P, Moody's and other credit rating agencies have warned of another cut if the federal government can't get its fiscal act together.
Bad thing: A big drop in federal spending could backfire by slowing the economy - thus costing the government tax revenue and widening the very deficit it was supposed to reduce.
- Republicans are resisting the President's call for more revenue as part of the sequester: they say they already gave in on $600 billion in higher taxes during the New Year's fight over income tax rates. Their message: enough is enough.
- Republicans also point out that the GOP-controlled House has passed a sequester replacement bill (twice), while the Democrat-controlled Senate has not. "If (Obama) wants to avert the sequester," a Boehner spokesman says, "shouldn't the President be focused on the House of Congress that HASN'T acted?"
- In terms of a hit on the American people, the sequester pales in comparison to what Americans have already endured: the bursting of the housing bubble in 2006 destroyed $8 trillion in wealth; the stock market's 57% drop that began in 2007 erased trillions more from 401k plans and other investments.
- The deficit is ALREADY falling: it is now down to 7% of GDP from 10% just three years ago. This drop (relative to the economy) is the biggest since the 1940s.
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