As CRFB has explained in a recent analysis, the Bipartisan Budget Act under consideration in the Senate would replace a portion of the mindless sequester cuts with more targeted reforms. One controversial proposal in the bill would reduce cost-of-living adjustments for working-age military retirees. This blog explains that provision.
On Tuesday, Sen. Patty Murray and Rep. Paul Ryan announced a budget deal that set discretionary spending levels for the next two years, removed some of sequestration's cuts, imposed targeted spending cuts and fee increases, and modestly reduced deficits over the next decade (see our full analysis of the deal).
Replacing the sequester will be an important item on the conference committee's agenda, and it may also be the most difficult. Right now, the two parties differ as to how to replace it, with Republicans advocating for only spending cuts as offsets and Democrats seeking a mix of revenue and spending cuts. When it comes to the defense sequester, which is slated to reduce the defense budget by $490 billion over the next ten years, Democrats may be particularly wary of replacing defense cuts with cuts to non-defense programs.
Although the possibility of a US military strike on Syria is now in question, the possibility has also led to public statements regarding the relationship between defense priorities and the budget.
Over the weekend, President Obama made his widely anticipated remarks on the conflict of Syria, making his case for taking military action against the Syrian regime in response to a chemical weapon attack a few weeks ago. He also stated that while he believed that he had the authority to take action himself, he would leave it up to Congress to vote on.
The sequester has always been a blunt and mindless way to reduce the deficit, and for the Defense Department, its effects are now clearly being seen. On Monday, the Defense Department began furloughs for its civilian workers, which will eventually affect more than 650,000 workers according to the Washington Post. Eleven furlough days are expected to be needed in order to meet targets or around one without pay per week until the end of September.
Although efforts to replace the sequester have been on hold for a while, the House Democrats, led by House Budget Committee ranking member Chris Van Hollen (D-MD), have come out with a bill to replace the remaining 2013 and part of the 2014 sequester with $181 billion of savings over ten years. The bill is similar to one Rep.
Over the past few years, lawmakers have made the most progress in discretionary spending in the deficit reduction effort. Additional opportunities for finding efficiencies in the discretionary budget exist for defense and nondefense, but right now cuts are being done through sequestration, which imposes blunt, across-the-board reductions instead of targeting areas where resources could be allocated better.