Hearing on sequester turns into budget battle between Ryan, Obama

A House Budget Committee hearing Wednesday on how to replace the impending sequester mechanism quickly became a verbal tussle between committee chairman Paul Ryan (R-Wis.) and Danny Werfel, controller for the White House Office of Management and Budget — and, more specifically, between the president’s budget plan and Ryan’s.

“The president has put forward a balanced deficit reduction package to avoid the sequester. This package achieves more than enough deficit reductions to avoid the sequester if Congress chooses to act and pass it,” Werfel told the committee. “…The president made clear that he would veto any legislation that attempted to cancel the sequester — in part or in full –without achieving at least the minimum $1.2 trillion of deficit reduction agreed to in the Budget Control Act.”

Ryan said the deficit reduction package in question was just the Obama budget proposal, which would reduce spending and increase taxes at the same time.  “We had a vote on it about four weeks ago and it got no votes,” he said. “If that’s the plan– avoid the sequester by passing the president’s budget — that’s not much of a plan. That’s already done.”

The sequester is a tool that requires mandatory spending cuts; sequestration was agreed to by both parties in July 2011 when a Supercommittee failed to find $1.2 trillion of savings in the overall budget.

While Werfel said he didn’t believe the White House budget proposal the House had unanimously voted down was the same as the Obama budget, he allowed that the president’s plan called for taxes: $1 for every $2.50 in spending cuts. “In the president’s budget, the net revenue impact is $1.5 trillion in increased revenue,” Werfel said. “The president has asked for balance, and the president has indicated he is willing to work with Congress on a balanced approach. I don’t think we have to draw a line in the sand.”

Werfel also challenged the Republican budget, introduced by Ryan, on cutting welfare and meal programs without touching farm subsidies, something Ryan said the House planned to address later in the Farm Bill.

“It strikes me,” Ryan said, “that the president is changing the definition of the deal, or at least moving the goalposts from spending reduction to tax increases. Is that what the new definition of what replacing the sequester is?”

Ryan and other committee members also asked OMB to provide clear itemization of what programs and departments would be exempt from sequester budget cuts, which are scheduled to take effect early next year and will slash billions of dollars from the Defense Department and other government programs. Just this week, OMB ruled that health care administered by the Department of Veterans Affairs would be exempt from sequestration, a topic that has caused months of speculation without clear answers.

Werfel said judgment calls still had not been made on a number of programs that might merit exemption, and there was no clear timeline for making those determinations. He said the administration continued to insist that the focus was on preventing the sequester, not preparing for it.

“How will we know how to replace this if we don’t know how it works?” Ryan said.

Congressional Republicans and Democrats agreed to sequestration as part of the Budget Control Act last July. While both parties believe the measure must be avoided before it takes effect, no solution has emerged with bipartisan support.