WASHINGTON -- As members of President Barack Obama's economic team surveyed the fiscal landscape following the 2012 election, they were haunted by spending cuts set to take effect at the end of the year.
Sequestration was the rare public policy passed for purposes of being avoided. The cuts were designed to be so onerous (a 7.3 percent reduction in discretionary defense spending, a 5.1 percent reduction in non-defense spending, and a 2 percent reduction in Medicare) that lawmakers would hustle to replace them.
But the presidential aides didn't hustle. Instead, they stalled in finding a replacement policy. And as the days drew closer to the sequestration deadline, the angst level rose inside the West Wing. One senior administration official, who helped in planning for the automatic cuts, said that the impact was far more severe than most appreciated. The possibility of a short-term economic recession was discussed, said the official, who spoke on the condition of not being quoted.
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