The Politics of Sequestration

The following excerpt, from Bob Woodward’s book, The Price of Politics, has been cited often by Congressional Republicans the last few weeks. After being seen as caving time and again to President Obama’s demands at every manufactured crisis of his presidency, they have finally backed into a situation of which they are in control. Using the words of Woodward, a respected Capitol Hill reporter, is the perfect way to shift the onus of coming up with a replacement to the $1.2 billion of automatic spending cuts (“sequester”) due to the Budget Control Act of 2011 to the Democrats. Woodward describes the scene how, at the eleventh hour, the White House staff came up with an idea to ensure the needed cuts in spending were achieved by the “Super Committee,” in order to satisfy the House Republicans’ request for a guarantee that they would actually happen.

At 2:30 p.m., [White House Budget Director Jack] Lew and [White House Legislative Affairs Director Rob] Nabors went to the Senate to meet with [Senate Majority Leader Harry] Reid and his chief of staff, David Krone.

“We have an idea for a trigger,” Lew said.

“What’s the idea,” Reid asked skeptically.

“Sequestration.”

…[T]he beauty of a sequester, they said,[is that] it’s so ridiculous that no one ever wants it to happen. It was the bomb that no one wanted to drop. It actually would be an action-forcing event.

“I get it,” Reid said finally.

The Republican argument is simple. If the president came up with this idea, the lion’s share of responsibility to avoid it has to be his. And avoid it he must, because he’s been talking up the dire consequences of letting it stay as is, as recently as in his State of the Union address, when he said that “Democrats, Republicans, business leaders, and economists have already said that these cuts…are a really bad idea.”

Republicans have twice passed plans out of the House replacing these cuts, only to be stalled by the Democrat-controlled Senate. President Obama, after the Super Committee failed to come up with its own $1.2 trillion in savings, famously threatened to veto any attempt to repeal it. He said, “My message to them is simple: No. I will veto any effort to get rid of those automatic spending cuts to domestic and defense spending. There will be no easy off-ramps on this one.”

And now the President is faced with the looming sequester and little leverage to force the Republicans into accepting what he always calls “a balanced approach.” But at this point it seems like the president’s “balanced approach” to the deficit is to say the phrase “balanced approach” a lot while asking for more tax hikes.

This is exactly what he did, saying in a statement on February 5: “I think this balanced mix of spending cuts and tax reform is the best way to finish the job of deficit reduction.” Senate Democrats then released a plan on February 14 replacing the first year of cuts by raising taxes on incomes over $1 million over 10 years to raise half, and splitting the remaining cuts between the years 2015 through 2021. This plan is as unserious as they come, as all it does is kick the can of spending down the road while raising taxes now.

Furthermore, the “balance” achieved by this plan, of $1 of raised revenue to correspond with $1 in spending cuts, is less than President Obama’s own plan from 2011. In it he says: “The President’s framework would seek a balanced approach to bringing down our deficit, with three dollars of spending cuts and interest savings for every one dollar from tax reform that contributes to deficit reduction.”

It’s clear that the Democrats are banking on the Republicans to cave, just as they did all the previous times. But now it’s different, and the Republicans know it. Senate Minority Leader Mitch McConnell, who is credited for brokering the last-minute compromises in the past with Vice President Biden, said: “It’s pretty clear to me that the sequester is going to go into effect…Read my lips: I’m not interested in an 11th-hour negotiation.”

McConnell has good reason to be confident, as the very fact the Republicans are negotiating from a position of strength at this point is to his credit. When McConnell decided to postpone sequestration and only deal with tax rates at the time of the “Fiscal Cliff,” many on the right were disappointed. But by isolating the sequester, McConnell has finally gotten the Republicans, who are often accused of “hostage-taking” tactics by the left, a hostage they are willing to shoot. Unlike the Debt Ceiling negotiations, where the worst-case scenario if no deal was reached was a default, and the Fiscal Cliff negotiations, where if no deal was reached the result would’ve been higher tax rates for everyone, Republicans are fine with letting the sequester actually happen, because they believe Democrats will be blamed for it.

Is sequestration, and its indiscriminate, across-the-board cuts, all that bad? By all accounts it is, even though in recent days some have downplayed its significance. But the opportunity it affords to force the president’s hand to achieve some meaningful spending cuts is too great an opportunity to pass up at this point.