StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



Pre-Season Is Over: Sequester Politics Opening Day Is Today

01 Mar 2013
Posted by Stan Collender

What's happened so far on the sequester is the equivalent of spring training in baseball and pre-season in football: It doesn't count and isn't necessarily indicative of what's ahead.

But everything changes today as the sequester that so far has only been hypothetical and something primarily discussed inside the beltway starts to become real for increasing numbers of voters outside Washington.

This is not an insignificant number of people. Polls taken over the past week or so show that only about 25 percent of Americans say they have been following the sequester argument (It's really hard to call it a "debate"). That number will increase rapidly as the sequester spending cuts reduce federal services that people rely on and like and voter emotions change from amusement to annoyance to outrage.

This is not speculation: It's exactly what happened during the 1995 and 1996 government shutdowns. Republican intransigence changed to extreme political concern as the shutdowns continued and the federally-provided services that many outside of Washington didn't even realize were federally provided continued to be unavailable to them. The inconvenience changed to anger and then outrage when those who did business with the government realized they couldn't get their invoices processed and proposals reviewed, and there was no way to deliver what had already been ordered.

A sequester is not a shutdown and its effects will become increasingly apparent over the coming weeks rather than instantly. The programs and services that will be affected immediately will be those that are not labor-intensive such as grants and contracts. As the month continues and layoffs and furloughs begin to be implemented, other activities that are heavily dependent on employees providing a service -- meat inspections, airport security screenings, air traffic control, etc. -- will be increasing reduced.

I expect the White House to be announcing the program-by-program layoffs and furloughs well in advance of them actually occurring. Therefore, the reductions in services will increase anxiety and accelerate the political impact before they are implemented.

Once the focus of the sequester shifts from inside to to outside the beltway, the politics should change substantially. The members of Congress that today are saying they are absolutely adamant about letting the sequester stay in place will start to waiver as their constituents become increasingly unhappy about the impact of the spending cuts on their lives. That's exactly what happened in 1995 and 1996

But...There are three big difference from the two federal shutdowns that could affect this: (1) the number of safe congressional districts, (2) the tea party, and (3) John Boehner (R-OH) being a much weaker speaker than Newt Gingrich (R-GA). These changes mean both that House members may not care as much about overall approval ratings as they do about the approval of their base voters in their individual districts, and that their leadership may not be able to sell them on any deal even if it wants to make one. If that's the case, the sequester could stay in place much longer than either of the two shutdowns did individually or cumulatively.

 

 

What happens at the end of

What happens at the end of March when a CR needs to be passed to fund the government through the rest of the year?


Must prepare for a full government shutdown

We all must expect and prepare for a government shutdowm come April 1. If the sequester was unthinkable at some prior point, and has now come to pass, then a complete shutdown of government is now thinkable And even beyond thinkable, beyond likely, almost a certainty, considering the gerrymandered state of the congressional map, and ideological purity demanded by GOP party faithful.


Shutdown Certainly Is Thinkable

The unthinkable now is a shutdown without end. So, how many months can the government operate with "essential" employees only? (And under what authority?)


Sequester-CR interactions are tricky to estimate

It is becoming clear that government spending and plans for spending were slowing down quite a bit months in advance of right now (starting in anticipation of the Jan 1 date and then continuing right now). So I would not be incredibly surprised to see the immediate employment effects end up smaller than some may think, since they were already "baked in" starting in December or earlier. That said, if we get an actual shutdown at the end of the month, things could really go down hill pretty fast, since the situation now is much more tenuous than might be estimated currently.


I do not anticipate any kind

I do not anticipate any kind of a shutdown unless Democrats for some reason want one. Republicans oddly seem realistic about when and how hard they can push their views. Fiscal Cliff: check. Debt ceiling: check. Sequester: looking like a check. What is galling a lot of Dems is that they underestimated how hard Republicans could push and how well they would slip big punches. Yes, there are rounds remaining, but I have the GOP ahead on points, which is a shame since it really is not good for so many people. Still it isn't exactly their job to promoted a more skillful Democratic party.


Stan- what are your thoughts

Stan- what are your thoughts on how the continuing resolution deadline will play out? Is there any risk of a government shutdown now that the deficit reduction target has been achieved?


I know you know this, but

I know you know this, but it's a very different thing to do a shutdown ahead of a midterm election than one ahead of a general election.




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