Sequester Seems to Have Emboldened, Not Hurt, Some Republicans

May 31, 2013— -- The sequester's barely visible economic impact combined with relatively strong economic forecasts doesn't seem to have hurt Republicans politically and may have even made them bolder.

Obama warned for months that the layoffs and pay cuts that would result from domestic and military spending cuts would slow the economy to a crawl, but few of those warnings have come to fruition since the sequester took effect on March 1.

"What's happening is really reinforcing and reinvigorating a central conservative view that many of the activities of the federal government are not core competencies and could be better performed by others," said Juleanna Glover, a Republican lobbyist and adviser to several major GOP figures such as President Bush, Vice President Cheney and former Sen. John Ashcroft. "The fact that we can see these 5 percent cuts are not really causing as much screaming and crying as we would all have expected is really invigorating to conservatives."

Strong economic data, falling deficits and blockbuster Wall Street profits are contributing to the perception that the economy is doing better in spite of the sequester.

That's a far cry from the predictions Obama made in March.

"All of this will cause a ripple effect throughout our economy. Layoffs and pay cuts mean that people have less money in their pockets, and that means they have less money to spend at local businesses," Obama said. "That means lower profits. That means fewer hires. The longer these cuts remain in place, the greater the damage to our economy: a slow grind that will intensify with each passing day."

These predictions may yet be proved true -- and many experts argue that things eventually get worse on the economic front -- but at the moment, it's a hard sell.

In recent months, the word "sequester" has dropped precipitously from the president's rhetoric. One of the last times Obama talked about the sequester was jokingly at the White House Correspondent's Dinner in April.

"Take the sequester. Republicans fell in love with this thing, and now they can't stop talking about how much they hate it. It's like we're trapped in a Taylor Swift album," Obama riffed.

Turns out, Republicans probably don't hate it all that much.

The cuts were initially designed to administer pain equally on both sides of the aisle. Automatic domestic spending cuts were most likely to hurt programs near and dear to Democratic hearts. And military spending cuts were designed to nudge Republicans away from letting them kick into place.

The cumulative effect of both types of cuts was also supposed to be dramatic.But more and more, Republicans seem comfortable with the fact that the economic impact of the cuts hasn't been that great. The economy seems to be doing well for the first time in years.

"I don't think taking 2 percent off the top in a $14 trillion economy is going to be a big drag on growth," said House Budget Committee Chairman Rep. Paul Ryan, R-Wis., when asked at a fiscal summit in Washington earlier this month whether the sequester had hurt the economy.

And that makes Obama's argument that the GOP would get stuck with the blame a much more difficult argument.

"Obviously, this is what presidents do all the time: They want to try to leverage public opinion to create momentum for either policies that they're pushing or for revising policies they don't like. Sometimes it works and sometimes it doesn't," said Bill Galston, a fellow at the Brookings Institution and a former adviser to President Clinton. "I always regarded it as a long shot."

Sure, Republicans do hate the military cuts, but the public outcry from lawmakers representing military districts and other constituencies of military spending isn't coming as fast and furious as everyone expected it would.

Despite warnings from defense officials that sequestration has already hurt military readiness, there has been no significant effort to address them in Congress.

Ryan, at that same fiscal conference in Washington this month, said defense cuts were producing "dislocations," which is a far cry from the rhetoric being used by military officers such as Army Chief of Staff Gen. Ray Odierno who said recently that the cuts were "killing us."

There's so little talk about the sequester in Washington, it's easy to forget that Congress intended it to be such a catastrophic consequence for not dealing with the nation's long-term deficit that they would never actually let it happen.

"A deadline is action forcing only if all parties to a dispute are worried about the consequences of inaction," said Galston. "And that condition was not satisfied in the case of the sequester because most Republicans prefer the sequester to any feasible replacement for it."

As the sequester cuts continue to take effect, the consequences seem to have been greater for the constituencies Democrats care about than those Republicans care about – at least for now.

Head Start, a preschool program for low-income students, is getting smaller, which means that fewer kids may have access to early childhood education. And unpaid furlough days are rolling through the federal government.

But this is just the beginning, experts say. More pain is ahead of us not behind us.

The threat of the terrible consequences has been the major motivating factor in congressional action, from the debt ceiling fights to the fiscal cliff in December. This time it doesn't seem to have worked.

It will make the next major fight, over the debt ceiling, much more interesting, as it remains to be seen whether the threat of harm to the economy will hold as much sway.

Some hope that replacing sequester cuts will be part of a big picture deal that also addresses the upcoming debt limit, but as Glover put it, "We're in uncharted territory."

For Congress to address the cuts, "it's going to take a negotiation," said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and the former chief economist to Vice President Joe Biden. "It's going to be in the context of one of these deadlines."

"I'm not confident that we're going to see the last of the sequester, though, for a little while," he said. "I'm afraid it's kind of settling in."