WT Business Beat

By Nick Wakeman

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Nick Wakeman

Sequestration nightmare over by Sept. 30? Maybe

Sometimes, fear of reprisals and political gridlock can work in your favor.

The way Trey Hodgkins--TechAmerica’s new senior vice president of global public sector advocacy--tells it, members of Congress are reluctant to act on most issues so close to an election because doing so might give opponents ammunition to use against them.

One exception, though, is sequestration; in fact, not acting might be worse.

Now, don’t expect a silver bullet solution. Hodgkins predicts that sequestration’s deadline of Jan. 3 will be pushed back, and that the delay will be an amendment to a continuing resolution to keep the government open beyond Sept. 30 when the fiscal year ends.

There is already an agreement for a continuing resolution to keep the government funded until March, so adding a sequestration delay shouldn’t be that difficult.

But a March delay for sequestration really isn’t that significant, Hodgkins told a group of reporters.

He’s hoping for a year’s delay. That will give the new Congress and a new administration of either party time to come up with a new plan.

Besides being a manufactured crisis, the big issue with sequestration is that no one really knows where specific cuts will come, nor does anyone know what programs and contracts will be affected. The Obama administration is slated to release guidance on Friday, but Hodgkins said it will likely not have the detail that contractors need to make plans.

But let's say sequestration does get pushed back a year; that doesn’t mean that the lame duck session of Congress won’t have a full agenda in November and December.

They’ll still need to do something on the Bush tax cuts and the 2 percent withholding tax exemption, both of which are set to expire.

No one wants to deal with those issues now because it is sure to make someone mad before the election. So, they are avoiding those issues, Hodgkins said.

But are the few weeks in the lame duck session enough time to take on huge issues such as tax reform? Maybe, according to Hodgkins.

Me, I’m not so sure. Perhaps we’ll see another six-month or a year extension on the tax cuts, as well. And maybe another delay beyond that. There’s nothing like governing by procrastination.

Posted by Nick Wakeman on Sep 06, 2012 at 9:52 AM

Reader Comments

Fri, Sep 7, 2012 Doug Huneycutt outside the beltway

Pushing back the actual across-the-board cuts would avoid the immediate effects of sequestration, but would only exacerbate the corporate lack of confidence that is currently killing the job market. With investors to answer to, what company (large or small) is going to take risks today that would have been mild during better times? Kicking the can down the road is not a good business plan. Grow a backbone, Congress ... both sides! Right now you're both just actors in the same bad soap opera, whose only goal seem to be keeping your show on the air. Remember that, like TV shows, you exist only at the pleasure of your audience (thats ME and the rest of the pawns out there).

Fri, Sep 7, 2012 David Boylan

The only thing congress does well is to "kick the can down the road". That needs to stop now and the President has the power to force it to stop (at least in this one case) by simply doing nothing. He can then ask for a new bill on Jan. 3 which defines how he wants the sequestered money to be programed and timed. Congress with then find it in their own polictal interest to actually compromise and reach an agreement.

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