November 22, 2011
by Christopher Sands
Lifting the U.S. debt ceiling is necessary once more before the 2012 elections. When Congress struck a deal to raise it once in 2011, they empowered a super committee of members of the House and Senate to identify additional cuts of $1.2 trillion as a precondition for raising the debt ceiling again.
Without a deal in the super committee, Congress designed a process of "sequestration" that would produce automatic budget cuts, 50 per cent of which would come from non-defence spending and 50 per cent that would come from the defence side of the budget.
At the same time, the Congress redefined "defence" spending to include an array of national security line items, including the Department of Homeland Security, the Department of State, and the Federal Bureau of Investigation. Cuts could range from two to five per cent of spending across the board, and in particular cases may be even heavier.
If a deal is not reached, savings sequestered from these departments and agencies could have an impact on relations with Canada. For example:
What can Canada do about any of this? On first glance, not much: the decisions are up to Congress, and the U.S. is a sovereign power.
And yet Canadian officials, both federal and provincial, can and should begin preparing for the coming austerity. Now is the time to reach out to counterparts for reassurance that they will have the resources to sustain engagement and cooperative initiatives. As cuts begin to be identified, they can stress to senior Obama administration decision makers that the cuts would be damaging -- or in some cases, Canadians may wish to suggest cost-sharing measures to keep critical conversations and joint-efforts going.
Ultimately, it may not be possible to ring fence everything that matters in the U.S.-Canadian relationship from cuts. Surely it will be a long, strange journey from now until November 2012.
Christopher Sands is a Senior Fellow at Hudson Institute.
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