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Posted at 12:55 PM ET, 08/01/2012

Obama budget chief Jeffrey Zients to Congress: Sequestration ‘not the responsible way’ to cut debt


Jeffrey D. Zients, acting director of the Office of Management and Budget. (Bill O'Leary - The Washington Post)

This story has been updated.

In a hearing that was at times highly partisan, the Obama administration’s budget chief squabbled with Republican members of the House Armed Services Committee Wednesday over who is to blame for failing so far to avert $110 billion in mandatory spending cuts set to affect defense and domestic programs in January.

About the only thing the two sides agreed on was that letting the automatic cuts known on Capitol Hill as the “sequester” go into effect would result in dramatic job losses and shrunken defense and domestic programs.

But they offered little new about how Congress might come to a bipartisan agreement in the next five months to set the across-the-board slashing aside.

And Jeffrey D. Zients, acting director of the Office of Management and Budget--who was joined by Deputy Defense Secretary Ashton Carter--offered few new specifics about how the cuts might be implemented, insisting it is premature to outline reductions when Congress is still working to avert them.

“We don’t want to begin taking actions now to tear ourselves to pieces to prepare for something that’s really stupid,” Carter told the committee.

Zients argued government agencies must strike a balance between preparing for the cuts while avoiding early action that would amount to a “self-sequester” that could result in job losses and cast a long shadow over the nation’s economy.

The testimony occurred as House Speaker John A. Boehner (R-Ohio) sent a letter to Senate Majority Leader Harry M. Reid (D-Nev.) offering to cancel Congress’s August recess--if the Senate takes up a House plan to shift scheduled military cuts to domestic programs.

Democratic leaders have said that proposal would ravage the social safety net. They say the only way to avert the automatic cuts is to strike a grand bargain to reduce the deficit through a combination of spending cuts and higher taxes.

The automatic cuts were designed to be painful. They were embedded in last year’s deal to raise the nation’s debt ceiling as a sword to hold over a special congressional deficit reduction supercommittee. If the committee failed to come up with a bipartisan deal to cut deficits by $1.2 trillion, the budget would face an automatic whack of that amount over 10 years, split evenly between defense and domestic programs.

Both parties have expressed hope that they can still come up with a deal to reduce the deficit with a less blunt instrument before the first round of $110 billion in cuts hits on Jan. 2.

Republicans have been focusing especially on the adverse effects of defense cuts--hoping that by pinning the potential impact on Obama, they can spoil his electoral chances in swing states with large military and government contractor populations.

The administration announced Tuesday that military personnel accounts would be exempt from the cuts, meaning they would result in even deeper cuts to military contracting and purchasing.

Zients also noted that because the cuts would come mid-way through the fiscal year, reductions that have been estimated to amount to about 8 percent of domestic program budgets and 10 percent of the Pentagon’s spending could actually rise as high as 13 or 14 percent.

“Sequestration is a blunt, indiscriminate instrument designed to force congressional action on achieving a balanced deficit reduction plan,” according to a prepared text of Zients’s testimony. “It is not the responsible way for our nation to achieve deficit reduction.”

Republicans on the committee accused the administration of using national defense as leverage to get higher taxes. In one particularly testy exchange, Rep. Randy Forbes (R-Va.) repeatedly asked Zients if he believed it was responsible to use “draconian defense cuts” as a tool to force congressional agreement.

Pressed, Zients first reminded Forbes that the sequester was agreed to both parties in Congress and then pinned blame on Republicans: “What is holding up now is the Republican refusal to have the wealthiest 2 percent pay their fair share,” he said.

In an op-ed in Tuesday’s Washington Post, House Armed Services Committee Chairman Howard “Buck” McKeon (R-Calif.) acknowledged that he supported last year’s agreement, and is now “obligated to resolve the crisis it has created.”

“Even though President Obama signed the Budget Control Act into law and insisted on the sequester so another debt-limit increase didn’t materialize before the election, it doesn’t appear that he shares the same commitment to resolution,” McKeon wrote.


Follow Ed O’Keefe on Twitter: @edatpost

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