N.H. Sen. Shaheen: Congress Unlikely To Act To Head Off Budget ‘Sequester’

Image: Official Senate Photo: Jeanne Shaheen
Official Senate Photo: Jeanne Shaheen

By Edward Donga
BU News Service

WASHINGTON – Acknowledging that the so-called sequester is likely to take effect as scheduled this Friday, Sen. Jeanne Shaheen, D-N.H., voiced pessimism on Tuesday regarding Congress’s ability to come up with an alternative between now and then.

“I think sadly we are still in the position of posturing as opposed to trying to come up with a real plan that’s going to address the situation that we’re in,” Shaheen told a legislative conference of the National Treasury Employees Union, the second largest federal workers union.

The looming sequester involves $85 billion in automatic, across-the-board federal spending cuts during the current fiscal year, evenly divided between defense and non-defense spending. So-called sequestration was included in 2011 legislation to raise the debt ceiling, on the theory that allowing the across-the-board reductions to take effect would be so disagreeable to both political parties that it would spur them to act to reach a long-term debt solution.

Instead, both sides remain at loggerheads over how to avoid the sequester.

A proposal by Senate Democrats seeks to replace the across-the-board reductions with a mix of spending cuts and revenue increases. Among other provisions, the Democrats’ plan contains the so-called Buffet rule—named for billionaire Warren Buffet—that would impose a 30 percent minimum tax on millionaires, along with spending cuts aimed at agricultural and defense spending.

But Senate Republicans, who generally oppose further tax increases beyond the $600 billion hike for the wealthiest taxpayers enacted in January, are expected to block action on the Democrats’ proposal

“We plan to present a proposal in the Senate this week that will address the cost of a year of sequestration,” Shaheen said, referring to the Democrats’ proposal. “But I don’t have a lot of hope that we’re going to see that proposal passed in the Senate.”

A state-by-state report on the impact of the sequestration – released this weekend by the White House to put pressure on congressional Republicans – noted that New Hampshire will be hit particularly hard by the projected cuts in defense spending.

According to the report, approximately 1,000 civilian Defense Department employees in New Hampshire will be furloughed at some point between April 1 and the end of the fiscal year on Sept. 30. The furloughs would reduce gross pay by a total of about $5.4 million, while Army base operation funding in the state would also be cut by $1 million, according to the report.

Earlier this month, Shaheen and Sen. Susan Collins, R-Maine, wrote a letter to Senate Democratic and Republican leadership, urging them to act to avoid sequestration. The letter noted the serious effects that the defense cuts would have on their states, particularly at the Portsmouth Naval Shipyard and the defense industries surrounding it.

During her talk Tuesday at the NTEU legislative conference, Shaheen said that her colleagues in Congress who are not worried about the impact of the automatic spending cuts fail to realize the effect these reductions will have on the private sector.

“They don’t have an understanding about what that does to the rest of this economy, and what that does to job growth and what that’s going to do to the economic recovery that’s still fragile,” said Shaheen, in an apparent reference to some congressional Republicans who have welcomed the sequester as a way to reduce the size of the federal government.

If the Senate proposal to head off the sequester fails this week, Shaheen hopes that the economic effects of sequestration might serve as an incentive for Congress to act on a long-term solution to the national debt.

“I think we need a long-term solution so that we’re not managing from fiscal crisis to fiscal crisis—because when we’re doing that we’re not addressing the other concerns we have as a country,” Shaheen declared.

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