When President Barack Obama and Congress agreed on the Budget Control Act, the law was described as a bipartisan compromise that averted the looming disaster of a government default.
The agreement, signed by the president in August 2011, authorized an increase to the federal debt limit and ended a stalemate that threatened the nation’s borrowing ability. The law placed caps on discretionary spending for federal programs to save more than $900 billion over a decade. It directed Congress and the White House to either agree to another $1.2 trillion in deficit reduction or have the reduction imposed through automatic across-the-board cuts to defense and other federal programs starting in January 2013.
The automatic cuts, known as sequestration, were intended as an impetus for compromise and were never expected to take effect. But Congress and the White House have been unable to agree on a deficit reduction package — and $109 billion in cuts are scheduled for January — so the Budget Control Act has become an issue in the November elections.
U.S. Rep. Mazie Hirono, a Democrat campaigning for U.S. Senate, voted for the law because she thought it would stabilize the nation’s fiscal situation and avoid plunging the economy into a double-dip recession. Former Gov. Linda Lingle, the Republican candidate, said she would have voted against the law because of the potential for "dangerous cuts" to the military and other federal spending that could harm Hawaii’s economy.
Hawaii was fourth among states in per capita federal spending in 2011 — at more than $21 billion, according to the federal Office of Management and Budget — and could be particularly vulnerable to automatic cuts because of the state’s large military presence. A study released in July by an analyst at George Mason University in Virginia estimated that sequestration could cost Hawaii more than 10,000 jobs, mostly in defense.
Hirono said the Budget Control Act was "a difficult and imperfect compromise."
"I do not have second thoughts about helping the American people avoid a double-dip recession, nor do I ever have second thoughts about protecting Social Security and Medicare for our kupuna," Hirono said in a statement.
"There is no greater moment for leadership than now. That’s why I’m focused on the future and working so hard to make sure that the U.S. Senate remains Democratic, and that President Obama gets re-elected. We all recognize that we need a big, bipartisan agreement to address our deficit and debt — while also recognizing that without strong voices fighting for the middle class, we’ll be sending our country backward, not forward."
Hirono called the automatic cuts "a meat ax approach to deficit reduction" that should be avoided.
Lingle said Hirono and others in Congress should have had the foresight to recognize the potential impact of the law. She cited Secretary of Defense Leon Panetta’s warning to Congress that automatic cuts to the military could threaten national security.
"Unlike Congresswoman Hirono, I wouldn’t have supported sequestration that would have included such steep and dangerous cuts to our military and our nation’s defense as Secretary Panetta has warned," the former governor said in a statement. "Instead, I believe it is important to deal with the issues at hand, rather than kicking the can down the road as our current Congress has done too often. Our deficit spending must be reined in, and our nation’s looming debt must be addressed, but the sequestration is not the way to handle it.
"Congresswoman Hirono and others in history’s most unpopular Congress should have had the foresight to recognize the impacts of their delayed decisions."
The Budget Control Act was approved by the Republican-controlled House in a 269-161 vote. Republicans overwhelmingly favored the law, while Democrats were divided. Hirono and U.S. Rep. Colleen Hanabusa, D-Hawaii, voted with the majority.
U.S. Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee and the GOP’s vice presidential candidate, at the time called the law a bipartisan compromise that reflected a "huge cultural change to this institution."
The Democratic-controlled Senate approved the law 74-26. U.S. Sens. Daniel Inouye and Daniel Akaka — Hawaii Democrats — voted with the majority.
Former Massachusetts Gov. Mitt Romney, the GOP presidential candidate, contends that the automatic cuts in the law were a mistake and has blamed Obama for insisting that half of the reductions come from defense. Ryan has said the defense cuts were never supposed to occur and has noted that House Republicans have since tried to prevent the cuts by taking the money from other federal programs.
Obama’s Office of Management and Budget has characterized the automatic cuts as a "blunt and indiscriminate instrument" that should be averted before January.
The automatic federal spending cuts are scheduled to take effect at the same time that more than $500 billion in federal tax cuts are set to end. Tax breaks approved under President George W. Bush and a temporary payroll tax cut in Social Security adopted under Obama are scheduled to expire at the end of the year.
Economists and budget analysts have described the scenario as a "fiscal cliff" that, if allowed to happen, could lead to another recession.
