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What to Cut? Sequester offers lessons in latest budget talks

For the duration of the Obama administration, congressional Republicans have mostly lacked the numbers to cut spending and begin reining in the nation’s now-$17 trillion debt. That is, until President Obama handed them the scissors -- the sequester.

It was not his intention, and Republicans did not fully recognize what they'd been given, until recently, when the full measure of the sequester's impact became apparent. 

"Sequestration is better than sliced bread," said Tom Schatz of Citizens Against Government Waste. "It's the only thing that has prevented  the government from growing larger over the past two years." 

The ups and downs of that program, though, are likely to inform lawmakers as they once again sit down to negotiate a budget deal, following the partial government shutdown. 

Sequestration had its origins in the fierce debt-ceiling battle of 2011. At that time, the president's team, in an attempt to force Republicans into a compromise, devised the sequester as a nuclear option of sorts. Its sweeping cuts across all discretionary spending, including to defense spending during a time of war, would be a pill so bitter, the thinking went, that Republicans might blink at the negotiating table.

Ultimately, neither side side. The sequester -- to everyone's surprise -- took hold. 

Sequestration has been the law of the land now for seven months. It is the only mechanism that has blocked Congress from bellying up to the "all-you-can-eat-bar "of government spending. 

Yet,  it was only after last week’s deal to end the partial government shutdown that Republicans seemed to fully grasp the full worth of the sequester contained in the Budget Control Act of 2011. 

"What the BCA showed is that Washington actually can cut spending. And because of this law, that's just what we've done. For the first time since the Korean War, government spending has declined for two years," Senate Minority Leader Mitch McConnell said last week on the Senate floor, as the deal was struck.

The administration, like McConnell, has also touted  the lower deficit, but hardly attributes the sequester for the turnaround. Last Sunday, on NBC's "Meet the Press," Treasury Secretary Jack Lew said  the sequester is  "holding back the economy." 

Republicans maintain that's a hard sell to a public left relatively unscathed  by the sequester. "If you poll the American people in terms of the sequester, less than one in four felt any impact at all," Sen. Tom Coburn, R-Okla., recently said on the Senate floor.

But both parties agree sequestration remains an ax, not a scalpel. The Defense Department says the cuts threaten to severely damage readiness, as other agencies complain about the lack of flexibility. 

CAGW's Tom Schatz  points to just one example, among thousands. "There are more than 200 science, technology, engineering and math programs across the federal government -- 13 agencies. $3.1 billion  a year. And sequestration cuts through all those 209 math science engineering programs equally, making no distinction between good programs and bad programs, " he said.

Because sequester is automatic for nine more years, it can only be changed or undone if both Houses vote to change it. For that reason , the sequester presents a powerful tool for Republican negotiators in the budget conference committee scheduled to report back to Congress and the president on Dec. 13. It offers them leverage  to force Democrats to address the real driver of the debt, entitlement spending.

Left unchanged, the combined unfunded entitlements of Social Security and Medicare threaten to bankrupt the country, Schatz says.

Doug McKelway joined Fox News Channel (FNC) in November 2010 and serves as a Washington-based correspondent. Click here for more information on Doug McKelway