With the upcoming Fiscal Year 2014 budget proposals soon to be due in Congress, the sequester makes the job of Republicans and Democrats even more difficult. The House and Senate pushed their respective budgets forward on Thursday and Friday.
In these times it is common to see commissions and think tanks come up with their own solutions for the long-term debt, even critiquing current proposals.
Former Sen. Pete Domenici (R-NM) and Dr. Alice Rivlin, who served as director of the Office of Management and Budget (OMB) and later the vice chairman of the Federal Reserve under President Bill Clinton, have created a bipartisan blueprint to solve the current problem. Both serve as co-chairs of the Bipartisan Policy Center’s Debt Reduction Task Force.
They both call for a quick, bipartisan approach as the only way towards a fiscally sustainable future:
“The failure of the parties to negotiate an alternative to the sequester profoundly disappoints us and the American public. The challenge of developing an alternative seems eminently doable, compared to previous fiscal challenges that we negotiated successfully. The sequester is bad policy. The economic recovery remains extremely fragile, and immediate spending cuts will act as a further fiscal drag while doing nothing to address the drivers of our future debt burden.”
Although the stock market has reached several milestones in the past several weeks since the sequester took effect, there are still weak spots in the overall economy and the long-term fiscal outlook for the U.S. government.
This past week, both the Senate and House passed their version of a budget, both dominated by the majority party in each chamber. The Senate, which passed its first budget in four years, proposed additional revenue increases while incorporating $875 billion in cuts over ten years.
The House budget proposal, crafted by Rep. Paul Ryan (R-WI), is strikingly different. Its cuts are focused on balancing the budget by 2023. Ryan’s budget plan treats sequestration as a means to an end.
This is another difference between his plan and that of Sen. Patty Murray (D-WA), chairwoman of the Senate’s Budget Committee:
“Sequestration was not deficit reduction. It was there to trigger deficit reduction that would come from replacing it.”
These recent votes also show which politicians are willing to vote against their party. The Ryan budget passed the House, but ten Republicans joined the Democratic opposition. Additionally, five GOP senators voted with Democrats against going forward with Rep. Ryan’s budget.
The spending cuts that make up the sequester point to a further divide between how both parties wish to manage them. Each proposal takes into account cuts, but with varying amounts and on different agencies. The House proposal would take away funding from social safety nets such as food stamps and Medicaid.
The sequester’s effects have already been felt. A continuing resolution that passed Thursday granted more time for government agencies to handle the cuts more efficiently. The sequester is still in place, albeit somewhat reduced.
The weak spots in the economy must be fixed before further crises erupt within the next decade. There is no easy solution, but if it is not stabilized, the debt will get exponentially worse.