Remember Sequestration?

Congressional Republicans have insisted on defunding, delaying or repealing the Affordable Care Act as a condition of keeping the government running. Congressional Democrats have refused to negotiate over the health care law, and much of the federal government has shut down.

This is being cast as a catastrophe for the G.O.P., whose internal party divisions have been laid bare in weeks of tense budget negotiations. But in many ways, the shutdown represents a victory for Republican budget priorities. Conservatives have made the choice between the budget and the health law. That means there has been very little wrangling over the budget itself â€" indeed, many Democrats would go ahead and pass a bill financing the government at current levels.

What would be so bad about that, from a Democratic perspective? It might mean locking in the $1 trillion in long-term budget cuts known as sequestration.

Federal agencies â€" from the National Cancer Institute to the State Department to the Commodity Futures Trading Commission â€" are operating on very thin budgets, in historical terms. In the fiscal year that just ended, they had to absorb about $29 billion in sudden budget reductions, with children left out of Head Start and research projects unfunded. The Pentagon took the worst of the blow, with defense absorbing about $43 billion in cuts in the 2013 budget year.

Congressional Research Service Source: Congressional Research Service calculations based on Office of Management and Budget data for 2014 fiscal year. Notes: 2012 fiscal year values estimated; values for fiscal years 2013 through 2018 reflect president’s budget proposals.

These cuts were never meant to happen. Sequestration was never supposed to go into effect. It was intended to force Congress to come to the table and negotiate a smarter package of deficit reduction, probably one focusing on the fast-growing programs like Medicare that pose a long-term budget problem. (As you can see on the chart above, which comes from a Congressional Research Service report, mandatory spending is the fast-growing budget category, and debt service costs are expected to start growing, too.)

The idea was that both Republicans and Democrats would hate the cuts so much that they would never let them stick. But Republicans interested in a slimmer government have learned to love them, at least a little. Many members would prefer to see the defense cuts reduced and entitlement programs trimmed. But they have not argued for shunting more money to, say, the Departments of Education and Health and Human Services. Many Democrats, on the other hand, want the cuts repealed, restoring billions of dollars to those federal agencies.

“Non-defense discretionary spending” has been squeezed, and nobody in Washington is talking about taking the vise off. Normally, Washington spends about 3.2 to 3.8 percent of economic output on that spending category. The Congressional Budget Office expects the figure to fall to about 2.7 percent by 2023.

Congressional Research Service Source: Congressional Research Service analysis of Office of Management and Budget historical data and March 2012 Congressional Budget Office data.

The White House and Democrats on Capitol Hill have pushed for restoring spending on certain priorities. The Senate, controlled by Democrats, passed a $3.7 trillion budget back in March that repealed sequestration and replaced it with a mix of tax increases and spending cuts. But the House budget, also passed in March, made many of the sequestration cuts deeper. The divisions between the two parties are deep, and right now finding the votes to continue financing the government at last year’s levels seems the most likely path forward.