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Thursday, February 21, 2013

Worse than a crime, etc.

In trying to pin the sequester on Obama, Republicans never really say exactly what they're blaming him for. Is it for actually wanting the savage cuts -- a suggestion that doesn't pass the laugh test? Or for being weak or foolish enough to let them inflict it on him and on the country? That must be it -- notwithstanding it doesn't reflect very well on them.  They're the ones insisting that the meat ax is better than a) simply calling the thing off, since no one intended to enact it, or b) replacing it with a mix of more targeted cuts and modest tax hikes.

Ruth Marcus speaks my thought exactly (and I suppose I've more or less reiterated hers):
The Obama administration is guilty of bad negotiating in pursuit of sensible policy. Congressional Republicans are guilty of exploiting the president’s bad negotiating in pursuit of terrible policy.
And yes, Obama, never willing to carry a fight to the finish, gave up his point of maximum leverage:

Which brings me to the administration’s fault in this mess: squandering its leverage on taxes when it accepted the cliff deal. In the administration’s imagining, this money was just chapter one; the second wave would come with another $600 billion or so through tax reform.

Except the White House seems to have forgotten to ask Republicans about whether they were up for more. The threat of sequester has turned out to be less scary than the hammer of tax increases for all. That crisis averted, and the GOP base unhappy with the increases already passed, Republicans’ incentive to cough up more revenue has evaporated.
As I wrote a couple of weeks ago....what's the good of a blog if you can't repeat yourself a little?
Obama and the Dems co-negotiated the sequester. Say if you like that they never intended for it to go into effect -- but they put themselves in a position to let it happen. Put another way, Obama and Biden, through the deal they cut at year's end in a last-minute override of Harry Reid, have let the leverage they had on Dec. 31 be reversed. More broadly, Obama has put us in this position through his serial unwillingness to force a confrontation -- in December 2010, in August 2011, and in Dec/Jan 2011-12. 

In each case, you could argue -- and the administration did argue -- that allowing a deadline to pass without a deal would have negative consequences for a vulnerable economy.  If Obama was right about this in Dec. 2010, and in late July 2011 -- the latter is a big "if" -- then the time to pull the trigger at last was arguably at the fiscal cliff's edge -- because it wasn't really a cliff. It was a curb less steep than the current one.* And Obama shunted Reid aside because Reid was not willing to cut a deal that did not postpone the sequester for a year.

So if the sequester is a disaster, it's on Obama. And because he is its co-author, the attempt to blame it on the Republicans is alloyed with co-responsibility.  That was true to a degree at the fiscal cliff deadline, too. But because tax hikes are such anathema to Republicans, and the Bush tax cut sunset was their doing, the pressure on them was greater then than now. As we heard ad nauseam during the runup, once the sunset occurred, the roll-back of any part of the cuts would have been a tax cut rather than a hike.
Honestly, I don't see how this ends well. At best, everyone agrees to call the whole thing off after a bit of pain is inflicted, probably in three-month intervals, until maybe Obama gets a barely face-saving sliver of revenue, $100-200 billion over ten years to balance another $800 billion in cuts.

Sure hope to be proved a fool for indulging in forecast.

Postscript: this boils it down: 

Sequester lesson: don't put a gun to your own head.
* Update, 2/25: Rereading this (prompted by a link from the Dish), I'm not sure what I meant by "less steep." "Less likely to be continued down  without putting the brakes on" is more like it, because I think the pressure of wiping out the tax hikes would have been a better prompt for a deal that got Obama his full (albeit "twice scaled back") revenue ask of $1.2 trillion or thereabouts. And getting that extra $600b would have meant replacing the $1.2 trillion sequester with $600b in cuts.

Update 2/26: Brian Beutler makes an argument that Obama may have chosen the right ground on which to let full-bore confrontation happen after all:
The most important factor in this fight is probably the fact that Obama doesn’t have to face voters again and is willing to veto sequestration replacement bills if they’re composed of spending cuts only. Congressional Democrats are fully aware of this, too, and that creates a powerful incentive for them to hold the line.

So sequestration will begin. Obama won’t cave. And then the tension sequestration was intended to create — and in fact has created — between defense hawks and the rest of the GOP will intensify and actually splinter the party. If that doesn’t happen quickly enough, then the sequestration fight will become tangled up in the need to renew funding for the federal government at the end of March. If Republicans don’t cave before then, they’ll precipitate a 1995-style government shutdown, public opinion will actually begin to control the outcome and Republicans will cave.

So there are real dynamics at work here that can break the GOP’s resolve in this fight but that can’t easily be turned against Obama. Which means even though months of sequestration and a government shutdown followed by an outright Obama cave is a theoretically possible outcome, there’s very little about the nature of the fight to make me think it’s likely to happen.
 Jeez, I hope he's right and I can lambaste myself as he of little faith.

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