Despite Sequester, Government Shutdown Remains Unlikely

The long-feared automatic spending cuts are set to start late Friday, and now Congress must deal with another deadline at the end of this month. Tamara Keith talks to Melissa Block about what happens next.

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MELISSA BLOCK, HOST:

These words - sequestration, the continuing budget resolution - maybe you agree with what President Obama called them today in his press conference, Washington gobbledygook. Our congressional correspondent Tamara Keith is going to help explain some of that gobbledygook now and walk us through what happens next. Tamara, sequestration becomes official before midnight tonight whenever President Obama signs an order and sends it out. What happens after that?

TAMARA KEITH, BYLINE: Well, when I came in this morning to the Capitol, one of the Capitol police officers greeted me with a happy sequestration day, and it was very cheery. I think that the cheer is going to fade over time. The first thing we're seeing are a lot of letters going out. Government agencies are sending notices to their employees and the people they serve, preparing them for cuts. Just one tiny example, the Treasury Department is going to have to shut down its system that sends out some bond payments to recalibrate it to the new lower levels. And while it's doing this recalibration, the payments will likely be delayed and other payments are going to be smaller going forward. Some agencies are going to be sending out letters to their employees warning that in 30 days, they will be furloughed, and others are instituting higher freezes. So it won't be immediate and at least, initially, it won't be obvious. But over time, the sequester effects are going to build.

BLOCK: Now, the president met at the White House with congressional leaders today. There were no breakthroughs coming out of that meeting. Does that mean sequestration is now set in stone or could they still act to undo it?

KEITH: It seems quite clear now that these cuts are real and they're most likely sticking around, at least the dollar amount. As we've heard from the president and Republicans alike, these cuts are being made with either a meat ax or a meat cleaver. They aren't strategic, and it seems likely that Congress will find a way in the coming months to make these cuts more strategic, smarter, you know, why furlough air traffic controllers when you could have fewer, cheaper vehicles in the federal fleet for instance. So there are a lot of areas of inefficiencies, and the sequester in its current form just doesn't target those inefficiencies. And everyone seems open to trying to make these cuts smarter.

BLOCK: Now, all this time, the clock is ticking on the next Washington crisis that Tom Bowman just mentioned and that's that if Congress doesn't act, the government could shut down entirely on March 27th. What are leaders saying about that?

KEITH: Well, House Republicans have very much moved on to that next step, and they're actually scheduled to vote next week on a continuing resolution. And let me translate the Washington gobbledygook. Currently, we are operating under a temporary funding extension. That's what's keeping the government open. This would be another temporary funding extension to keep the government going through the rest of the year. It would lock in the sequester cuts. It would assume that those are there. And then it would, however, give some more flexibility to the Defense Department, at least over its budget.

BLOCK: And how are Democrats and the president responding to that idea?

KEITH: I wouldn't say they've given it a glowing endorsement. But they seem willing to accept it while they're working on other angles to limit the pain of the sequester. So don't you worry, there will be hemming and hawing and blame throwing in the next few weeks, but at least right now, it looks like we can put away our countdown clocks until this summer and that's when we're set up for yet another fight over the debt ceiling.

BLOCK: OK. NPR's Tamara Keith on Capitol Hill. Tamara, thanks so much.

KEITH: You're welcome.

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