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Are Sequester Cuts on the Way Out?

Lawmakers and the American public seem to agree on two things lately: First, sequestration was designed to be so unpleasant that it would never go into effect, and second, something needs to be done about the sequester.

The question is what.

Senate Majority Leader Harry Reid, D-Nev., took a page from Republican Rep. Paul Ryan of Wisconsin recently when he put forth a plan that would erase the automatic, across-the-board budget cuts for another five months.

"I think we should do something about sequestration," Reid said Tuesday. "We should do what was in one of the Ryan budgets - that is, use the Overseas Contingency Fund to delay the implementation of sequestration."

That fund consists of money set aside for fighting the war in Afghanistan through 2021, though combat operations for the conflict are set to end in 2014.

In just a couple days, the plan has received support from some big-name Democrats and the White House.

"We support this effort to allow both sides to find a longer-term solution that replaces the sequester permanently in a balanced way so we can stop these harmful cuts that are hurting our economy and middle-class families across the country," White House Press Secretary Jay Carney told reporters at the daily briefing Wednesday.

But with the war already supposedly winding down, some have criticized Reid's plan as a "gimmick," using "fake" savings to offset real costs.

Marc Goldwein of the non-partisan Center for a Responsible Federal Budget compared paying for the wars to a student graduating from college.

"It's not like you suddenly save $20,000 a year or $40,000 a year," Goldwein said. "It's just that college is only supposed to be 4 years or 2 years."

After graduation, he added, "You've got to start paying back your student loans."

Sen. Ben Cardin, D-Md., supports Reid's plan, but also suggested finding savings in tax expenditures.

"We have to look at a broader level than just these discretionary spending accounts that are particularly devastated by these sequestration cuts," Cardin said on the Senate floor this week. "I would urge the Senate to find a way that we can replace sequestration for this current fiscal year with more responsible budget savings, and then working through the appropriate committees for FY14."

In the month before sequestration went into effect, several plans were offered up, each with no success.

Sen. Sheldon Whitehouse, D-R.I., introduced a bill with four other Democratic senators that would have replaced the sequester law with higher taxes on high-income earners and the closing of loopholes like a tax break for private jet owners.

Sens. Jim Inhofe, R-Okla., and Pat Toomey, R-Pa., offered a plan that would have kept sequestration while giving President Obama more power to direct how the cuts should be made. Obama threatened to veto the plan and all except for two Democrats voted against it, killing the bill. But the duo reintroduced a new version of it Wednesday, the day after Reid introduced his bill.

President Obama's budget for FY2014 also represents an alternative to the sequester. Through a combination of closing tax loopholes and curbing the growth of entitlement spending, the plan would put an end to the across-the-board sequester cuts while achieving $1.8 trillion in deficit reduction over 10 years.

Without any bipartisan support, none of the plans are likely to become law and sequestration, despite its lack of support, will remain.

UPDATE:

Rep. Ryan's office reached out to respond to Reid's comments:

"Senator Reid is absolutely incorrect," a spokesperson for Ryan said. "Not a single penny of claimed spending reductions in any of the recent budgets put forward by House Republicans come from this gimmick."

Last night the Senate passed a piece of bipartisan legislation that relieves one of the most noticeable downsides to sequestration: FAA furloughs.

The bipartisan piece of legislation gives the FAA transfer authority for $253 million until October to put towards meeting the staffing challenges that have created staggering delays this week.

Similarly, the Continuing Resolution passed at the end of March gave the Defense Department the flexibility to delay furloughs of civilian workers. It also took care of one of the most lamented defense sequester cuts, the tuition assistance program for active duty troops, by ordering all branches to restore their programs.

This piece-by-piece picking off of sequestration's controls is one other option for how Congress could handle the killer cuts.

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