While many eyes in the political world are watching Mar. 1, the deadline for sequestration’s automatic, across-the-board cuts of about 10 percent, another deadline later in the month may trigger more fireworks on Capitol Hill.
In what he’s calling the “second sequester,” Barry Anderson, deputy director for the National Governor’s Association, said the Mar. 27 expiration date for the Continuing Resolution (CR) now in effect could stir up more action than the looming 10 percent cuts.
“If we’re going to get some kind of deal, some kind of real budgetary action, it’s going to be on March 27 or soon thereafter,” Anderson told a room full of attendees Wednesday at the Association of Government Accountants’ National Leadership Conference in Washington. He added that, unlike the sequestration cuts, which are automatic unless Congress takes action, no action on the CR would result in a government shutdown.
“I am optimistic that both the house and senate budget committees will produce a budget resolution, because they don’t get paid if they don’t,” Anderson said.
Still, he predicted that such an agreement would likely be a continuation of the status quo, economically speaking.
“Don’t get me wrong: I am not optimistic at all that we’re going to get a grand bargain,” he said.
Anderson predicts that an agreement likely to be hammered out between the House and Senate would be one that follows the current path set out in the CR for the remaining six months of the fiscal year. That would mean an additional $8 billion in reductions, on top of the $71 billion in cuts from sequestration, which Anderson predicts will go through.
Still, as the Congressional Budget Office outlined a week ago, sticking with current economic policy means the back half of the decade will be characterized by a looming debt burden and growing federal deficit.
While the national budget deficit is expected to make strides in the immediate years, shrinking to $430 billion or 2.4 percent of Gross Domestic Product by 2015, that progress is temporary. The CBO predicts increased pressures from an aging population, rising healthcare costs and growing interest payments on federal debt will by the end of the decade erase any steps made toward shrinking the deficit. By 2023, the deficit is projected to total $978 billion, or 3.3 percent of GDP.
“What we’ve done so far is basically totally ignore the biggest problem we’re facing,” Anderson said Wednesday.