Takeaways from the Senate Budget Committee's Sequester Hearing

The Senate Budget Committee hearing Tuesday on the impact of the FY13 sequester on national defense was summed up by Sen. Sheldon Whitehouse (D-RI), who noted: “For those who say that Congress can’t get anything right, the sequester certainly disproves that. It was intended to be stupid, painful, and damaging, and sure enough it has been stupid, painful and damaging.”

We have three major takeaways from the hearing, held by Budget Committee Chair Sen. Patty Murray (D-Wash).

• The letter and draft plan for a Fiscal Year 2014 sequester outlined recently by Defense Sec. Chuck Hagel clearly got the committee’s attention;
• For the first time, a committee in Congress heard from a small business that has had to lay off workers as a result of the sequester;
• A consensus seems to be forming that the FY13 sequester, if followed by an FY14 sequester, would, for the first time in more than 30 years, leave American forces unable to fight wars on two fronts simultaneously.

The present sequester for FY13 is beginning to show up in employment data, in our judgment. When Mark Klett, President of Klett Consulting, revealed that he has had to temporarily lay off 30 per cent of his work force, he could have been speaking for many small businesses. Our estimate of more than 1 million lost jobs over two years primarily was based not on the impact of a sequester on federal workers, but on the ripple impact of the sequester on medium and small-sized business.

Budget Committee Ranking Minority Member Sen. Jeff Sessions (R-AL) claimed that the impact on defense spending has been particularly painful: the Department of Defense, he said, apparently never believed that a sequester would happen and, therefore, failed to plan adequately for it. Sessions said that he believed that the White House had told the Defense Department not to plan for a sequester and, therefore, to achieve maximum job loss if a sequester happened.

The most analytical testimony was given by former Undersecretary of the Navy Robert Work, and Thomas Donnelly, former staff member for the House Armed Services Committee and a member of the U.S.-China Economic and Security Review Commission.

Work noted that the strategic change from the ability to fight two wars simultaneously to fighting one war and denying direct foreign aggression on the homeland was dramatic. He warned that the “mindless timing” of the sequester forced large reductions in Operations and Maintenance and would hurt the ability of the nation to have “surge” capability in the future.

Donnelly emphasized the strategic change: “Two (war-fighting capabilities) is the right answer for a global power. We have now crossed that threshold.” Donnelly warned that China’s mounting aggression in the Pacific threatened the U.S.-established regional peace in that area and that sequestration exacerbated that threat.

As Sen. Angus King (I-Maine) noted that the sequester in FY13 “was relatively easy; there was low-hanging fruit.” But, come the FY14 sequester, “we should look at ourselves. We have met the enemy and he is us (Congress.)”

Most noteworthy: no one offered a concrete plan to avoid a sequester in FY14. As we have written before, the spending gap between budget plans developed by the Senate and the House is huge and virtually guarantees another round of stop-gap continuing resolutions and some form of an FY14 sequester.

Holt Dwyer contributed to this post.