Friday, April 26, 2013

The Obamaquester

As the deadline for the sequestration cuts to take effect loomed last March, Republicans used that label to try to pin them on Obama. The sequester was his idea, they said. They were willing to substitute more intelligent, targeted cuts, but he insisted on new revenue, and "he already got his revenue" in January.

On one level, this argument was absurd.  The administration only "proposed" the sequester because Republicans threatened to let the country default on its debt if Obama did not agree to cut a dollar of spending for every dollar the debt ceiling was raised. Sequestration was a device designed to give the Democrats a later negotiating opportunity to replace some of those cuts with revenue. Obama was willing to compromise to prevent the meat ax from coming down; Republicans were not.  Obama does not want to cut spending by the amount stipulated in the sequester; Republicans do.

In another sense, though, the sequester does belong to Obama.

He let the GOP impose this ten-year vice grip on growth and prudent government investment and adequate funding of essential existing government functions.  He let it happen first, by embracing "grand bargain" negotiations under threat of national default as "a unique opportunity to do something big," undercutting his ability to stand against debt ceiling hostage-taking.  And if the resulting Budget Control Act that included the sequester could be justified as a strategic retreat, enabling his reelection by postponing further debt ceiling fights until 2013, that retreat was premised on standing firm when he had won reelection and so had the chance to preside over the expiration of the Bush tax cuts.  At that point too he caved, and let the sequester stand.  He has proved fatally conflict-averse.

Coincidentally or no, the framework for a deficit reduction plan from Bowles-Simpson's first rollout to the present has always been approximately $4 trillion over ten years -- a number close to the estimated revenue that would be gained by letting the Bush tax cuts expire.  When those cuts did expire, Obama restored them for 99% of Americans in exchange for just $600 billion in new revenue and a two-month postponement of the sequester.

Surprise -- Republicans proved wiling to let the sequester take effect -- and Obama signed a continuing resolution that locked the first tranche in place for the remainder of fiscal year 2013.  The Democrats shifted to the less advantageous ground of waiting for the cuts' ill effects to come home, putting pressure on Republicans to negotiate. And that brings us to the next sorry chapter, ably narrated today by Brian Beutler:
Last night, the Senate proved it can fix big problems for real Americans — so long as they’re rich, or relatively rich, or fly for business or what have you.

The short version is that late last night it took a break from its regular schedule of lacking 60 votes to shampoo the chamber carpet and unanimously passed a bill that will provide the FAA unique flexibility under sequestration — and thus halt the furloughs that have been causing travel delays around the country. Today the House will follow suit, and the White House has made it clear President Obama intends to sign it. Great if you fly. Bad, bad news if you’re on head start or rely on meals on wheels or otherwise aren’t a Priority Pass holder.

Aside the obvious iniquity, this is a big error.

The point of sequestration is supposedly to create just enough chaos that regular people — people with political clout, such as, say, business travelers — demand that Congress fix it. Or as the Democrats conceived it, to create the public pressure they need to knock Republicans off their absolutist position on taxes.

Well, they got their outcry…and then promptly folded.
 You could blame this particular cave on Senate Democrats. Every member in both houses has surely been hearing from wealthy constituents inconvenienced by the flight delays. But Obama has indicated he'll sign the legislation.  He sets the tone and direction for the party. If he didn't like this bill brewing, he would have had to say so loud and early.

Obama may not have lost his long-running budget battle with the GOP just yet. But the score so far on the ten-year playing field is spending cuts, about $3 trillion --  new revenue, about $600 billion. The chief means to raise new taxes - expiration of the Bush cuts -- has been squandered, and the secondary means, pain imposed by the sequester, is being squandered in stages.

Related
Is there a displaced rational basis for blaming Obama?

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