Thursday, November 17, 2011

Sequestration and A Reality Check – Part One

In this last week before the supposed deadline for the Supercommittee to resolve the issue of possible budget cuts, perhaps it’s a good time to do a reality check.

It’s a common belief, and I’d suggest an incorrect one, that if the Supercommittee fails to reach an agreement on $1.2 trillion in budget cuts over the next 10 years, there will be mandatory cuts in both the defense and non-defense budgets.

[Note that even if the Supercommittee does not each agreement, any “triggered” budget cuts will not take effect until 2013.]

Well, yes – on one level that’s what the deal was, as reached by the President and the Republicans this Summer, and as enacted by Congress (and signed by the President) at that time.

However what Congress does can be undone, subject only to a Presidential veto, which can (in turn) be undone by Congress.

Thus, if no agreement is reached, Congress could simply amend or repeal its earlier law mandating any “triggered” budget cuts.

Speculating, it seems unlikely that the President would veto any such acts of Congress, particularly if they were supported by many Democratic members of the House and Senate.

What would follow that is even more speculative, but I, for one, would hate to be any Congressperson running for re-election and who had voted in favor of kicking the can down the road, particularly if that triggered further downgrades in the government’s bond ratings.

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