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Fed's looming cuts may have silver lining

Congressman Blumenauer hopes self-imposed fiscal gridlock could lead to tax, spending reforms


by: TRIBUNE PHOTO: CHRISTOPHER ONSTOTT - The Troutdale Airport could continue operating, even if the FAA closes its tower. U.S. Rep. Earl Blumenauer refused to play the blame game when he spoke about the looming federal budget cuts last Friday.

Appearing before the Portland City Club a week before the first $85 billion in “sequester” cuts were scheduled to take effect, Oregon’s 3rd Congressional District Democrat did not predict the end of the world or try to blame Republicans for them. Instead, in an almost scholarly talk, Blumenauer said he hoped the cuts would spark conversations across the country that would lead to a series of federal tax and spending reforms.

“Most of what we are talking about here does not have to be part of fierce partisan divide,” Blumenauer told the packed gathering in the Grand Ballroom of the downtown Governor Hotel.

Blumenauer’s moderate tone was in sharp contrast to that of many Democrats. President Obama has tried to pressure Congress into raising taxes and reducing the cuts by holding news conferences with police officers, firefighters and teachers who, he says, are about to lose their jobs.

Asked last week for details on potential cuts in Oregon, the offices of Democratic U.S. Sens. Ron Wyden and Jeff Merkley both responded with a list prepared by the Democratic Policy and Communications Committee. The first line reads, “Sequestration Would Hurt Middle Class Families in Oregon.”

A list of cuts released by the White House on Sunday included similar language. Both lists predicted widespread and painful cuts in aviation safety, education, food inspections, health services, housing, research and senior programs.

Even some Republicans have predicted the cuts would cause serious problems. They are scheduled to total about $1 trillion in the next 10 years, resulting in hundreds of thousands of federal employees being furloughed or laid off. Billions of dollars worth of military and other contracts could be canceled, increasing private-sector unemployment.

Republican National Committee Chairman Reince Priebus has called the cuts “devastating,” although he blamed them on Obama and the Democrats.

Forced focus on issues

There are several reasons why Blumenauer is taking a different approach, however. A self-described policy wonk, he has always been a student of government.

by: TRIBUNE PHOTO: CHRISTOPHER ONSTOTT - U.S. Rep. Earl Blumenauer says federal budget cuts that could go into effect Friday might inspire political discussions on ways to balance the federal budget.In addition, during his speech, Blumenauer said the scheduled cuts were not the only potential financial crisis facing Congress. The continuing resolution that is keeping the government funded expires on March 27. And the debt limit must be raised later this summer.

But beyond all that, Blumenauer sees the situation as creating opportunities to address a broad range of issues that have always interested him. Even those who openly support the cuts are uncomfortable with the across-the-board nature of them. They include cuts of 8 percent to Pentagon programs and 5 percent to other domestic agency budgets.

Entitlement programs such as Medicare and Social Security are exempt from this round of cuts.

In his speech, Blumenauer said he hopes public backlash against the unfocused nature of the cuts eventually will force Democrats and Republicans in Congress to get together and compromise on a number of tax and spending policies. Among other things, Blumenauer said he hopes the personal and corporate income tax base can be broadened to raise more money, instead of raising tax rates that he called already the highest in the world.

Blumenauer also said the Pentagon budget needs to be realigned to fight the threats currently facing Americans around the world, instead of the Cold War-era nuclear missiles and bombs still targeted at the former Soviet Union. He also called for user fees on infrastructure and a carbon tax to raise revenue and reduce greenhouse gas emissions.

Many, if not most, of Blumenauer’s ideas could be characterized as liberal, if not exactly mainstream Democratic Party platforms. But he did not predict they would automatically be opposed by Republicans or prematurely blame them for what will happen if they are not enacted.

Despite the partisan nature of his public statements, Prebius also is using the looming cuts to advocate for larger policy changes, those favored by Republicans. They include a balanced budget amendment to the U.S. Constitution, with federal expenditures capped as a percentage of gross domestic product.

Cuts’ consequences

The cuts were established in the Budget Control Act of 2011. Commonly called sequestration, they were intended to be so deep that Congress would approve a mix of smaller cuts and tax increases before they took effect. A supercommittee was appointed to propose a so-called grand bargain that would reduce their potential harm. But, as Blumenauer noted in his City Club speech, the committee could not come to agreement.

In the days before the March 1 deadline, it was still unclear exactly what cuts would take effect or when. It was widely reported that travel delays at airports would increase substantially because the Federal Aviation Administration and Transportation Security Administration would be forced to furlough employees. But on Monday, Portland International Airport spokesman Steve Johnson said there had been no official word from either agency.

Johnson said that although the flight tower at the Troutdale Airport was on a closure list prepared by the FAA, the small airport owned by the port could continue operating without it.

The lists of potential cuts in Oregon prepared by the White House and Democratic committee paint a grim picture, however. Among other things, they say that 141 teachers could lose their jobs, 600 children will lose access to Head Start, 3,670 special education students will lose support, 300 children will lose child care, 462 fewer women will be screened for cancer, and 1,780 fewer children will be vaccinated. And millions of dollars will be cut from senior services, housing and community development programs, medical and scientific research, and police and fire budgets.

Even if all that is true, some Oregonians still say the cuts must go forward.

“We have to cut the federal budget and get our spending house in order,” says Karla Kay Edwards, Oregon State Director of Americans for Prosperity, a conservative political action committee aligned with the Tea Party.