Bad Law Rising: How Budget Sequestration Might Unfold

After being in denial for most of last year about the meaning of the Budget Control Act, Pentagon policymakers are beginning to realize that sequestration is probably going to happen. Under the law, that would result in the Pentagon’s base budget being cut another $55 billion below the present plan in fiscal 2013 — and in each of the eight subsequent years. The current thinking is that a lame-duck session of Congress after the November elections won’t repeal the law, and so sequestration will be triggered for at least a few months in 2013 before the new Congress comes to its senses.

Well good luck. I have a more plausible scenario: the political system remains stalemated, Congress fails to change the law, and everyone quickly gets used the new, lower level of defense expenditures. Everyone, that is, except those who were counting on getting the missing $55 billion. Obviously, things won’t play out this way if some new and urgent military threat arises, but if it does not, then there’s no external forcing function to focus legislators’ minds on the consequences of sequestration. In such circumstances, constituent interest will be the only factor driving repeal of the law, and once the White House exercises its option to exempt military personnel from the cuts, there might not be much constituent interest.

What makes this scenario plausible is the likelihood that November elections will deliver a split decision. In other words, neither party will win control of the White House and both chambers of Congress. With partisan sentiment as polarized as it is, split control of the government would probably lead to the same paralysis on budget issues that we have been witnessing for years — including on the subject of amending or repealing the sequestration provision. It appears that large factions in both national parties care less about maintaining a robust defense posture than they do about core domestic issues such as avoiding tax increases or preserving entitlements, so that suggests the defense department could be orphaned in all the political wrangling unless some new threat materializes.

If Republicans win both the White House and Congress, then sequestration of defense funds probably will go away quickly, since they will have the power both to change the law and to achieve savings through other means. If Democrats sweep the elections, they too would probably avert sequestration through amendment or by raising taxes. But if both do well enough in the elections to exercise a veto over the efforts of the other, then they cancel each other out and nothing changes. Sequestration is triggered, and maybe stays in effect for years to come. At that point, U.S. defenses will begin deteriorating quickly, eventually emboldening some overseas adversary to act rashly and thus setting the stage for the next big surge in defense spending. Right now, though, the next big surge looks a long way off.