Spending cuts: Welcome to the new normal

In Congress, which lately has found it difficult to agree on anything, the sequester to cut $1.2 trillion over the next decade has become inextricably locked into spending dynamics for federal employees and contractors. Even President Obama—who, with most Democrats, is eager to repeal the sequester—has felt obliged to include in his new budget other spending cuts and tax hikes that would replace it.

The handling of the sequester and other recent budget gymnastics demonstrate that the severe cuts in "discretionary" spending programs have become widely accepted as the "new normal" in federal budgeting. Lawmakers in both parties who might have battled in the past about how to spend $1 million have barely glanced at the sequester cuts, which will total $85 billion over the final seven months of this fiscal year—split evenly between defense and domestic programs.

"These cuts show that the federal budget process is even more dysfunctional than Congress thought" when it created the sequester mechanism in 2011, said Philip G. Joyce, a budget expert and professor at the University of Maryland's School of Public Policy. "Congress thought that no one would allow the sequester to take effect. But the result shows that the two parties are so calcified that they can't reach agreement to avoid even more blame."

Obama has used his bully pulpit to urge repeal of the sequester, but he may have overplayed his hand. So far, the public has largely shrugged off sometimes-dire warnings -- from Education Secretary Arne Duncan about the firing of school teachers, Transportation Secretary Ray LaHood about the closing of air traffic control towers, and Defense Secretary Chuck Hagel about cutbacks of military missions. Indeed, the most controversy seems to have resulted from closing of public tours at the White House.

Former Obama speech-writer Jon Favreau conceded that critics wonder whether Obama has "cried wolf." In a Daily Beast article, he defended the President's persistence, even though it has had little impact. "Washington may continue to treat sequestration as a boring nuisance," he wrote. "But gradually, painfully, it is making very real the centuries-old debate about the proper role of government in our society."

But Joyce said that Obama's alarms might have made the prospect of changes even less likely. "The President's cry of wolf was a terribly self-inflicted wound," he said. "Everyone knew that nothing would happen in the next month or two until furloughs took effect….But the question is whether even that will affect the public. These changes are at the margin. Many people already believe that federal programs don't work well anyway."

The public may be more willing to accept such inconveniences, rather than more dramatic shutdown of national parks or the passport office, for example.

Congressional Democrats, who have been second-guessing Obama's budget strategy, conceded to Republicans on the decision to include the sequester cuts as part of the six-month extension of federal spending that was enacted last month. And they worry that Obama's efforts to regain the initiative may be hampered by his willingness to discuss cutbacks in Social Security and Medicare spending.

Republicans, for their part, have been pleasantly surprised that they have achieved substantial budget savings, even though many of them have voiced concerns about the impact on the Pentagon. Some have urged modifications to permit more flexibility in national-security spending. And they are quick to point out that it was Obama's senior aides who originally crafted the sequester option during the 2011 showdown over raising the debt ceiling.

When the House and Senate last month passed their separate budget plans for next year, the Republican-controlled House voted to retain the sequester while the Democratic-controlled Senate foreshadowed Obama's effort to eliminate it. Even if the sequester stays, however, a little-noted detail is that next year it would not require across-the-board cuts in all agencies.

"After 2013, there are not automatic, proportional cuts of affected discretionary programs," wrote Richard Kogan of the liberal-leaning Center for Budget and Policy Priorities. Instead, the Appropriations Committees will "decide how to fund discretionary defense and non-defense programs within the newly reduced funding caps."

By the time those spending bills are enacted, Obama and Congress may have reached a "grand bargain" to reduce the deficit, with cuts in entitlement programs and perhaps some tax hikes. Ironically, the scant public and political objections to the sequester may make it more difficult to restore those cuts.