By Jeremy Herb and Erik Wasson - 10/02/13 10:00 AM EDT
It appears the sequester is here to stay — much to the chagrin of defense hawks, appropriators and defense industry.
Defense lobbyists and lawmakers are frustrated that the ObamaCare fight in Congress has completely overshadowed the debate over eliminating sequestration, and efforts to ward off $52 billion in automatic defense cuts set for fiscal 2014 have fallen by the wayside.
“The defense community is just sick of all this ObamaCare nonsense,” one longtime defense lobbyist told The Hill. “The House has voted to repeal ObamaCare 40-plus times and not had a single vote on getting rid of the sequester.”
Lawmakers failed to pass a stopgap spending bill amid Republican demands to defund or delay the Affordable Care Act, leading to Tuesday’s federal government shutdown.
When all the yelling over the healthcare law is over, the grim reality for the defense industry — which has long held significant sway in Congress — is that the unpopular sequester looks set to remain in place unless the congressional dynamic changes.
Any hope of a replacement deal before the fiscal year begins on Oct. 1 completely evaporated when Senate Democrats decided last week to accept sequester-level spending in the fight over funding the government.
“There are three vehicles we can fix sequester with: the [continuing resolution], the debt ceiling and the omnibus [spending bill]. Right now the train is leaving the station for the first two,” the lobbyist said.
Lawmakers from both parties want to reverse the automatic cuts to the military, which would slash $500 billion from Pentagon budgets over a decade. Democrats have also pushed to reverse the across-the-board cuts to domestic agencies.
But the two parties have been deadlocked for two years over how they would replace the cuts due to disputes over taxes and entitlements.
Warnings from military leaders about the havoc sequestration is causing within the services — and warnings from defense firms about the damage to the industrial base — have failed to move the needle in Congress.
The ObamaCare fight has only muddied the political waters further for contractors, who now face short-term pain from the shutdown halting new contract awards.
“I think the defense industry is in the paradoxical position of feeling as though it is getting along with the Pentagon’s leadership but has become an orphan in the political system,” said Loren Thompson, a defense analyst with the Lexington Institute who consults for several defense firms.
“For my entire lifetime, there was always at least one political party that had adopted the defense industry as its cause. Now it doesn’t feel like that,” he said. “It feels as though the industry is adrift amid indifference of the political system.”
One senior industry official said that Congress had entered “uncharted territory” compared to the shutdowns of the 1990s, due to lawmakers’ hardened positions.
“It looks pretty grim at the moment,” the industry official said.
“We’ve never really experienced this constant governing-by-crisis model where we just move from crisis to crisis to crisis,” the official said. “Every time Congress acts, the uncertainty seems to get worse, rather than better.”
Congressional opponents of the sequester want to see the focus shift back to the cuts, but many are pessimistic it will happen.
“I’m frustrated. There’s not a whole lot of focus on [military] readiness — there’s no readiness caucus,” Sen. Lindsey Graham (R-S.C.) said.
“As long as the planes haven’t moved from your state, the fact that they’re not able to fly doesn’t bother many people,” Graham added. “It bothers me.”
Sen. John McCain (R-Ariz.) said the shutdown and looming debt-limit fight has halted negotiations on sequestration and many other issues.
“It takes all the oxygen out of the room on everything, not just sequester,” McCain told reporters on Tuesday. “The Defense authorization bill should be up on the floor, but it’s not.”
Democratic leaders have accepted a sequester-level continuing resolution and chose not to fight the cuts in this round to keep the blame on House Republicans for any shutdown.
They decided to write a short-term funding bill that lasts until Nov. 15 to give Congress more time to draft an omnibus spending bill before Christmas that could end the sequester.
But the Senate Democrats’ strategy is opposed by House Armed Services Committee Chairman Buck McKeon (R-Calif.), even though he also hates the sequester.
McKeon said having a short-term funding bill that lasts until Dec. 15, as passed by the House, would give Congress more time to pass individual appropriations bills — particularly the Pentagon’s.
McKeon called the Nov. 15 omnibus plan “crazy” and said the House bill funding the government through Dec. 15 would be more likely to end the sequester.
The dim outlook was rampant over the past week among appropriators. At one point, House Appropriations Committee Chairman Hal Rogers (R-Ky.) answered a reporter’s question by pointing to a huge fake smile.
Rep. Tom Rooney (R-Fla.), an appropriator and sequester opponent, said he was befuddled over the next move.
“I’m not really sure the strategic play is there unless it is to get a number to work on,” he said. “In a perfect world, Buck [McKeon] is right, but here we are four weeks into September and we haven’t done one appropriations bill. What leads you to believe we will do any in the next few months?”
Defense hawks and appropriators say they still are working to try to reverse sequestration and hope they can at least undo the cuts for 2014.
But there’s much skepticism that any sequester replacement can come together amid the congressional gridlock.
“Good luck trying to thread that needle in six weeks,” said Todd Harrison, a defense budget analyst at the Center for Strategic and Budgetary Assessments.
“It’s been two years that the BCA has been in effect, and they have not found a way to work out a compromise around that. ... It is largely same group of people in Congress, the same leadership in both parties and in both chambers still in power.”