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Tuesday, October 23, 2012

Obama\'s Remark Aside, No Imminent Deal on \'Fiscal Cliff\'

President Obama set heads spinning on Capitol Hill when he declared on Monday night during the final presidential debate that sequestration - $1 trillion in across-the-board spending cuts over the next decade - “will not happen.”

But no one should conclude that a secret deal to resolve the problem is imminent. It is not.

Administration officials confirmed on Tuesday that the president was repeating conventional wisdom in Washington: a deal will be struck to head off cuts that would slice about 9.4 percent from most military programs and 8.2 percent from domestic programs, beginning Jan. 2. But nothing will happen until after the election.

Administration officials have been expressing that confidence for weeks, even as they say no real negotiations are happening. Congressional Republicans reacted to the president's pronouncement as if he had jabbed them with a hot poker.

The staff of the House speaker, John A. Boeh ner, posted a missive on his Web page to drive home two points: that the across-the-board cuts were the president's fault, and that only the House had actually done anything to prevent them.

“Neither have Senate Democrats. They won't even debate and vote on the House-passed bill,” said Don Seymour, a spokesman for Mr. Boehner. “Instead, Democrats have threatened to drive the country off the ‘fiscal cliff' â€" which includes these devastating defense cuts â€" in their quest for a tax hike on small businesses. They're pushing for tax hikes that will destroy more than 700,000 jobs but have taken no action at all to stop the sequester.”

Those points are debatable. The speaker's office pointed to a passage in Bob Woodward's new book on Washington's budget morass, “The Price of Politics,” that said that Jacob J. Lew, the White House budget director at the time and now the White House chief of staff, came up with the idea of automatic across-the-board cut s to help force a bipartisan Congressional committee to find at least $1 trillion in deficit reduction.

But the “supercommittee” was empaneled as a way to avoid an economic crisis with a default on federal debt only because House Republicans were refusing to raise the nation's statutory borrowing limit, or debt ceiling. The legislation that created both the supercommittee and the sequestration hammer was written on Capitol Hill and passed with the full support of the Republican leadership.

And it was that supercommittee - not the White House - that failed to reach a deal, thus prompting the sequester.

House Republicans did indeed take the tough vote to shut off the automatic cuts to defense, by shifting those cuts to domestic spending on top of the automatic cuts still scheduled to hit those programs. Democrats would not accept any such deal. It is also not true that Mr. Obama has failed to propose a solution to the pending cuts. His budget for the 2013 fiscal year, proposed in February, would have shut off the sequester and replaced it with a mix of spending cuts and tax increases.

It was a solution no more acceptable to Republicans than the House solution was to Democrats.