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Parties Look to Budget Battles with Sequestration a Reality

President Barack Obama meets with his CabinetPresident Barack Obama met with his Cabinet at the White House Monday. The president and Congress remain locked in stalled budget negotiations as the effect of the sequestration begin to impact the U.S. economy. Photo by Win McNamee/Getty Images

The Morning Line

With Washington bracing for impact on two fronts — ice expected to fall from the sky and across-the-board budget cuts slowly taking effect — the conversation has shifted to the budget battle that will dominate the final days of winter.

The $85 billion in sequestration cuts that became a certainty on Friday hung over President Barack Obama’s Monday cabinet meeting, the first of his second term.

“We are going to manage it as best we can, try to minimize the impacts on American families, but it’s not the right way for us to go about deficit reduction,” the president said. He said his agencies would be supported as they make “some very difficult decisions” but stressed that sequestration will hurt and the unemployment rate could go up.

Mr. Obama noted that it’s “an area of deep concern” and pivoted to his view that a “balanced” approach would be best for the nation’s long-term fiscal health.

“I will continue to seek out partners on the other side of the aisle so that we can create the kind of balanced approach of spending cuts, revenues, entitlement reform that everybody knows is the right way to do things,” he added.

That comment came as the Wall Street Journal’s Peter Nicholas and Janet Hook report that Mr. Obama has been “courting more junior GOP lawmakers in hopes of creating a coalition to push through a budget deal that includes tax revenue increases.” They found that in the last few days the president has phoned Republican Sens. Rob Portman of Ohio, Tom Coburn of Oklahoma and Bob Corker of Tennessee. Each senator has been known for dealmaking. Coburn was once considered one of Mr. Obama’s best friends on Capitol Hill.

And at the other end of Pennsylvania Avenue, House Republicans detailed a $982 billion, six-month spending measure that locks in new sequester-level spending and aims to “mitigate the adverse impacts of sequestration, not roll back the reductions themselves,” as Politico’s David Rogers puts it.

The proposal would give the Defense Department the ability to manage the reductions, adding $10 billion to the Pentagon’s operations and maintenance budget, offset with cuts to other parts of the defense system.

The language in the continuing resolution, which likely will get a floor vote by Thursday, makes clear that defense spending gets a carve out.

Except for the Department of Defense (DoD) and the Department of Veterans Affairs, the (Continuing Resolution) will extend funding for other government agencies at last year’s levels. However, the funding within the bill is subject to sequestration cuts. This means that the funding rate within the legislation is approximately $982 billion — the level required by the President’s sequestration order.

“The legislation will avoid a government shutdown on March 27th, prioritize DoD and Veterans programs, and allow the Pentagon some leeway to do its best with the funding it has,” said Appropriations Chairman Hal Rogers, R-Ky.

And on a dual track this month, Budget Chairman Paul Ryan, R-Wis., is crafting a new budget blueprint that seeks to be deficit neutral in a decade. The outline revives his idea for a voucher-like Medicare system and could raise the eligibility age for the program. Democrats have seized on the plan as harmful to seniors, with the Washington Post describing the party as “salivating over the framework.” Democrats say Ryan is doubling down on the Medicare wars that they believe helped their party last fall.

Senate Democrats are expected to reveal their budget outline next week, and both sides are expected to hold budget votes before the Easter recess.

And mark your calendars for March 21 — that’s when the Senate will hold its famed “votarama” on budget amendments. Roll Call’s Meredith Shiner got a hold of a memo from Budget Chairman Patty Murray’s office mocking the House GOP budget and hinting the direction Senate Democrats are heading. From the memo:

“We won’t be able to impact the budget House Republicans are preparing. But as we work on our own, and hope to find a path to a bipartisan budget agreement, the House Republicans’ extreme approach makes the need for a responsible alternative that puts middle class families first is all the more clear.”

Her plan is expected to include both spending cuts and tax hikes. Politico’s Manu Raju examined Murray’s difficult task of uniting Democrats around a plan.

With a new CBS poll showing 53 percent of Americans believe they will feel impacts of the sequester, several news outlets are looking at the affects. As The Hill notes, even getting into the Capitol will be harder, and Roll Call reports that members of Congress are getting a cut to the “allowance” they can use to travel back-and-forth between their districts.

With between 6 inches and a foot of snow forecast for Washington, and scant compromise on the horizon for spending matters, everyone should expect to bunker in.


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Katelyn Polantz, Simone Pathe and Cassie M. Chew contributed to this report.

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