–President Says In Final Debate That Sequestration ‘Will Not Happen’
–Analysts Uncertain If Comment Was Offhand Quip or Negotiating Stance
–$110 Billion In Across-the-Board Spending Cuts Set To Start in Jan

By John Shaw

WASHINGTON (MNI) – President Obama’s seemingly off-hand comment
during the final debate Monday evening that $110 billion in
across-the-board spending cuts in the 2013 fiscal year which are set to
begin in January won’t take place has already spawned a cottage industry
of political theorists and rhetorical deconstructionists.

“It will not happen,” the president said about the coming
across-the-board spending cuts during his debate with Republican rival
Mitt Romney. Obama first declared that the idea of these cuts “is
something that Congress proposed” during the 2011 debt ceiling
negotiations.

The genesis of these across-the-board spending cuts remains an
issue of fierce partisan dispute, with Democrats blaming Republicans and
Republicans blaming Democrats. These cuts, often referred to as
sequestration, are part of the fiscal cliff.

The fiscal cliff refers to the convergence of several significant
events: the expiration of the Bush era tax cuts and dozens of other tax
provisions at the end of this year; the first round of across-the-board
spending cuts scheduled to begin in January; and the need to increase
the statutory debt ceiling in the coming months.

In rough terms, the fiscal cliff calls for about $600 billion in
fiscal consolidation next year with about $500 billion coming from the
expiration of tax cuts and $100 billion from the across-the-board
spending cuts.

There are already a number of theories about what Obama was
saying — or meant to say — about sequestration during the Monday
presidential debate.

“I think the president was just saying what is likely to happen,”
says Bill Frenzel, a former Republican congressman who is now a guest
scholar at the Brookings Institution.

“I don’t think he signaled any concessions from his side or hinted
that he would throw in the towel during Lame Duck negotiations. He is
still holding to a pretty tough line on taxes,” Frenzel said.

The White House says that Obama was restating his long held view
that the $110 billion in across-the-board spending cuts should be
replaced by a “balanced package” of other spending cuts and revenue
increases.

“What the president said last night was a reiteration of what his
position has long been,” White House press secretary Jay Carney said
Tuesday.

“The sequester that was designed and passed by Congress was never
meant to become policy. It was never meant to be implemented,” Carney
said.

Another interpretation was that Obama’s comment was just a device
to beat back Romney’s attack on the president’s plans for defense
spending. During the debate, Romney pledged that he would not “cut our
military budget by a trillion dollars, which is a combination of the
budget cuts the president has, as well as the sequestration.”

Another theory, articulated by Frenzel and others, is that Obama
was just confirming political reality which is that after the elections
Democrats and Republicans will sit down and negotiate a resolution of
the fiscal cliff impasse.

Senate Majority Whip Dick Durbin said on CNBC after the Monday
debate that the expects Obama will be re-elected and predicted the
president will work in the Lame Duck session to “come up with an
approach that’ll avoid the sequester and really move us on a path to
reducing the deficit while still pushing this recovery forward.”

Still another interpretation of Obama’s remarks is the president
was signaling that he’s willing to make major concessions in the
post-election session at least on the spending cut side of the ledger.

Lawmakers are still trying to puzzle through the import of what
Obama said.

Republican Sen. Saxby Chambliss told a conference in New York
Tuesday that Obama’s comments “sent waves around Washington” but he is
uncertain what the president meant. “I understand they’ve backed off
that,” Chambliss said.

Republican Sen. John McCain said on a conference call Tuesday
that he was “stunned to hear that sequestration won’t happen. In order
for sequestration to be repealed requires passage of legislation which
requires the agreement of Congress.”

** MNI Washington Bureau: (202) 371-2121 **

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