The Washington defense establishment used to expect the life-or-death question of sequestration would be decided after Tuesday’s elections, in Congress’s year-end closing session. But the conventional wisdom has shifted: Now it appears that no matter who wins the White House, the lame-duck Congress is unlikely to have the last word.
That’s the consensus of defense watchers across Washington, several of whom told POLITICO they even expect sequestration to take effect, at least for the first few weeks after its official start date, Jan. 2. Billions of dollars in defense spending ride on the outcome of the election, as President Barack Obama has pledged to draw down the military, while Republican challenger Mitt Romney has said he’d plus it up.
So what might an endgame look like in the war of sequestration?
If Obama wins, Democrats could try to improve their negotiating position by allowing sequestration to take effect and letting the Bush-era tax cuts expire — forcing Republicans into a corner on two top GOP priorities.
“Some people think the circumstances are better for a deal if you just let everything expire first,” said Michael O’Hanlon, a senior fellow with the 21st Century Defense Initiative at the Brookings Institution. “It makes a deal with Republicans on taxes a lot more feasible because it doesn’t have to be couched as tax increases.”
If Romney wins, Republicans also could improve their negotiating position by waiting until January — once they take control of the White House — to haggle with their Democratic counterparts.
“I would expect that the lame duck would not foreclose any options for President-elect Romney,” said Mackenzie Eaglen, a resident fellow at the conservative American Enterprise Institute and an informal adviser to the Romney campaign.
From the defense establishment’s perspective, it all could add up to a lame-duck session that would truly be, well, lame.
“I don’t see any reason to think people are going to be any more reasonable during the lame duck,” said Patrick Lester, director of fiscal policy at the group OMB Watch, which last week released a report on how the White House could mitigate the early effects of sequestration.
“I doubt any budget deals are going to be cut between an outgoing president and Congress,” he added. “Folks in general are underestimating the chances that sequestration will happen and overestimating the immediate effects of it.”
That’s probably because the Pentagon and the defense industry have been shrieking like banshees for more than a year over the consequences of some $500 billion in across-the-board sequestration cuts over the next decade. But within the past few weeks, the tenor of the sequestration debate has become less apocalyptic, as both the White House Office of Management and Budget and analysts like Lester have made clear that if it were to happen, the bad stuff wouldn’t all take place immediately — effectively giving lawmakers a little more time to work next year.
In the House, Speaker John Boehner (R-Ohio) already is tamping down expectations for a grand bargain, or even a punt, in the lame-duck session.
“Lame-duck Congresses aren’t known for doing big things and probably shouldn’t do big things, so I think the best you can hope for is a bridge,” Boehner told CNN on Sunday during a campaign swing through his home state for Romney. “I would think that would be the best you can hope for and even that is going to be very difficult to do.”
The question then becomes how Obama and Romney would approach the situation come January — and how much the two candidates would be willing to budge when it comes to their plans for military spending.
For his part, Obama has made it clear where he stands on the Pentagon budget. The president has put forward a plan to reduce defense spending by $487 billion over 10 years, drawing down the size of the Army and Marine Corps, increasing fees for military health care and ending several weapons programs.
Since then, several top Democrats — including Senate Armed Services Committee Chairman Carl Levin (D-Mich.) — have said they’d be open to an additional $100 billion in defense cuts as part of a deal to avert sequestration, bringing the total to about $587 billion.
And if Obama wins, Democrats stand a good chance of pushing these cuts through Congress, experts say — since the alternative is sequestration, which would represent nearly $500 billion in defense cuts over 10 years, on top of the $487 billion.
“Obama’s in a much stronger negotiating position because the incentive for sabotaging him on the Republican side will be much lower,” said Mike Breen, executive director of the left-leaning Truman National Security Project.
Meanwhile, if Romney wins the presidency, the big question is whether Congress would be able to come to an agreement to push back the onset of sequestration until after his inauguration. “They might have to find a way to patch and punt, to allow Gov. Romney to enact his own proposals in 2013,” Eaglen said. “Presumably, there wouldn’t be a proposal from him until after he’s inaugurated.”
Of course, even a sequestration punt — or “bridge,” as outside groups have begun calling it — could prove difficult for Congress, as Democrats and Republicans would likely be divided on the terms of a deal.
“A Romney administration would prefer some sort of a stopgap measure, get to the new year and see if there’s a grand bargain available,” said Bill McQuillen, vice president of public affairs at JDA Frontline, a consulting firm. “The Democrats would want to stay in session as long as they can and see what they can ram through.”
Nora Bensahel, a senior fellow at the Center for a New American Security, agreed.
“If Romney wins, you’re likely to see Republicans push very, very hard to delay [sequestration],” Bensahel said. “But there is a real wild card: They can’t do it unless [Obama] signs it. And that gives him tremendous power during negotiations in the lame duck.”
In the past, Obama has said he would veto any deficit-reduction deal that doesn’t include revenue increases. But would he be willing to play hardball in his last month as president? “In that scenario, what it all comes down to is whether President Obama is willing to use his veto power,” Bensahel said.
Another factor that could shape a potential deal is the margin of victory for either candidate, and the latest polling data suggest a very close race. “If Republicans lose the presidential race, they’re going to say it was because Romney was somewhat of a flip-flopper and wasn’t conservative enough,” said O’Hanlon — meaning they could only retrench their no-revenues positions. “I don’t see anybody really crying uncle after Tuesday.”
A narrow Romney victory could embolden Democrats. “If he just squeaks by, it’s tougher to make a deal,” said Steve Bucci, a senior fellow for defense issues at the conservative Heritage Foundation. “The Democrats will say that he didn’t get a mandate so they’re not going to go with his deal.”
It’s unclear what type of mandate Romney would claim, though, regardless of the margin. His campaign hasn’t outlined how Romney would approach a potential deal to avert sequestration, beyond reaffirming his commitment to negotiating with both Republicans and Democrats. And although Romney supports increasing the size of the defense budget, his campaign hasn’t detailed how he’d pay for it.
“If I was a betting man, I would say that if Romney wins and has some sort of minimal mandate … you’ll see them shift the cuts to other parts of the budget,” Bucci said. “But probably not a hundred percent of them.”