by InvestorPlace Staff | January 27, 2013 5:33 pm
Even after reaching deals to avoid the fiscal cliff crisis and to temporarily avert a debt ceiling debacle, Republicans in Congress are still playing hard-ball when it comes to the long-term financial future of the U.S.
The latest proof? Rep. Paul Ryan’s appearance today on NBC’s Meet the Press. During it, the former vice presidential candidate insisted that the GOP was willing to let the sequester cuts happen, if they were unable to strike a deal to their liking with House Democrats.
The recent deals over the fiscal cliff and the debt ceiling did not fully fix the looming crisis of sequestration. This threat has loomed over head since the 2011 debt ceiling crisis was resolved, and though Congress has resolved many of the issues born from that deal, sequestration is not one of them.
There is now a new deadline of March 1 for the sequester cuts to be implemented, thanks to the fiscal cliff resolution earlier this month. These across the board budget cuts would affect nearly all levels of government spending, including the Department of Defense and the military, but would spare Social Security and Medicaid from cuts.
The Republicans want $12 billion per month in spending cuts, equaling the amount that the sequester would automatically implement. Democrats want a combination of spending cuts and revenue increases — what many Republicans call “tax increases” — to make up for the sequester.
Still, there’s still another chance for this can to be kicked down the road, much like the fiscal cliff and debt ceiling deals did. It is possible they might wait until March 27, when a Continuing Resolution to fund the government expires. This would place the sequester inside the larger debate on the budget, and give the GOP an additional point of leverage to use against Democrats — the threat of government shutdown.
– Benjamin Nanamaker, InvestorPolitics Editor
The opinions contained in this column are solely those of the writer.
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