We're still in the sequester's grip

George Packer zooms out from the latest fiscal skirmish to assess the state of budgetary warfare in the Obama era:

President Obama and the Democrats in Congress appear strong for refusing to give in to blackmail.

But in a larger sense the Republicans are winning, and have been for the past three years, if not the past thirty. They’re just too blinkered by fantasies of total victory to see it. The shutdown caused havoc for federal workers and the citizens they serve across the country. Parks and museums closed, new cancer patients were locked out of clinical trials, loans to small businesses and rural areas froze, time ran down on implementation of the Dodd-Frank financial-regulation law, trade talks had to be postponed. All this chaos only brings the government into greater disrepute, and, as Jenny Brown’s colleagues dig their way out of the backlog, they’ll be fielding calls from many more enraged taxpayers. It would be naïve to think that intransigent Republicans don’t regard these consequences of their actions with indifference, if not outright pleasure. Ever since Ronald Reagan, in his first inaugural, pronounced government to be the problem, elected Republicans have been doing everything possible to make it true.


These days, Republicans may be losing politically and resorting to increasingly anti-majoritarian means—gerrymandering, filibuster abuse, voter suppression, activist Supreme Court decisions, legislative terrorism—to nullify election results. But on economic-policy matters they are setting the terms. Senator Ted Cruz can be justly described as a demagogic fool, but lately he’s been on the offensive far more than the White House has. The deficit is in fairly precipitous decline, but job growth is anemic, and millions of Americans remain chronically unemployed. Democrats control the White House and the Senate, and last year they won a larger share of the national vote in the House than Republicans did. And yet the dominant argument in Washington is over spending cuts, not over ways to increase economic growth and address acute problems like inequality, poor schools, and infrastructure decay. “The whole debate over the last couple of weeks is playing against a backdrop of how much to increase austerity, not to invest in the economy,” Neera Tanden, the president of the Center for American Progress, said last week. “We are living in a time of government withering on the vine.”

Never mind the unstated irony in Packer's assumption that Republicans "win" by damaging the country, or that they revel in the havoc they've wrought on government.  All true, and not even worth expending rage on any more.  I expect no constructive input on policy from the current GOP.

When surveying the budgetary wreckage, I blame Obama. Stepping back to the GOP's House takeover in 2011, it seems to me that a Democratic president should have vowed to let his right hand wither and his tongue cleave unto the roof of his mouth before acceding to budget cuts on the scale Republicans were demanding -- which they essentially won, insofar as they themselves can continue to stand the sequester.

Blogs are a vehicle of repetition, and I am weary of reiterating my core complaint (2, 3): whatever Obama's mistakes in the summer of 2011, they were redeemable when he won reelection and went into 2012 with the Bush tax cuts set to expire. There he had the leverage to impose an acceptable sequester replacement -- that leverage amounting to some $4 trillion worth of automatic tax hikes over ten years, almost twice the monetary leverage that the Republicans had as the debt ceiling loomed in July 2011, when they were demanding $2.5 trillion in spending cuts. There too, unlike at debt limit rundown points, the risk of going past the negotiating deadline was acceptable: a few weeks of nominal across-the-board tax hikes that the GOP would not have been able to tolerate. Settling for half a revenue loaf, without even getting his revenue gains counted against the barely-postponed sequester cuts, was the real capitulation point in his presidency. Incredibly, he seems not to have anticipated that Republicans would prefer sequester implementation to new revenue concessions.

Ezra Klein may be right that at this point, Obama has no better option than to negotiate a sequester replacement with no new revenue, only with better targeted cuts and a few job growth measures. Otherwise, the only hope of fiscal sanity is Democrats winning control of Senate, House and presidency.  And who knows when that may happen?