Whatâs
Wrong Today?
Most of
the current Sequester discussion concerns who owns it, not what Congress should
do to solve yet another manufactured fiscal crisis.
Republicans
say Mr. Obama owns the Sequester. Democrats say Republicans voted for it too. The
Sequester was part of the 2011 Budget Control Act. In the House, votes were:
174 Republicans for it to 66 against. Democrats were split, 95-95. In the
Senate, 28 Republicans voted for it to 19 against, while Dâs supported it 45-6.
You donât care if it is Obamaâs Sequester or Boehnerâs Sequester. You want them
to come to an agreement.
OMG! Is
the sky falling?
If the
Sequester is activated on March 1, 2013, will our government disintegrate?
The Obama
administration, many pundits and some Republicans are warning of mass
government layoffs and services collapsing when “Sequestration”
begins in a few days, unless our gridlocked government finds a way to
circumvent the start of the $85 billion in federal budget cuts (of a $3.6
trillion budget).
Get a grip, thatâs only 2.6% of the budget, folks.
Also, the
full force of the $85 billion of cuts will
take several months to be felt, said White House budget office
controller Danny Werfel:
on a rolling basisâŚIt’s very harmful as you go forward. On a seven-month time
frame you’re going to see the effects relatively quickly.
Under the
law, retirees are shielded, so Social Security checks will arrive on schedule
at the beginning of March and every month thereafter. Similarly, the elderly
and the disabled will not see Medicare healthcare curtailed at all over the
seven months.
Every US soldier
will get paid and the Defense Department will be allowed to shift funds to
ensure that combat operations and “critical military readiness
capabilities” are not degraded, according to the Obama administration.
The
Wrongologist wrote
last fall that the Sequester would not throw us into recession:
in fiscal year 2013 (September 30). By that point, US GDP is
projected to be at $12.225 trillion ($16.34 for the calendar year 2013). If
government projections are right (they wonât be)⌠the Sequester might
reduce GDP by -0.53%. Not great, but thatâs better than in FY2011, when declining government spending
reduced GDP by -0.67%. And full-year
real GDP still grew by 1.8%. This
means we are likely to have GDP growth in FY 2013, not recession.
What
are the politics?
Republicans have decided that the Sequester,
rather than the government-funding bill due at the end of March is where
theyâll make their stand on spending cuts, The
Hillâs Alexander Bolton reports:
the bruising political battles of the last Congress, GOP leaders have decided
the looming automatic spending cuts provide the best leverage to move President
Obama to negotiate on costly entitlement programs.
So, a year which
began with multiple âtrigger pointsâ for a Republican-generated meltdownâthe
debt limit, the Sequester and the continuing resolutionâwe are down to just the
Sequester.
GOP leaders see the Sequester
as the political inverse of the fiscal cliff. Republicans felt they had little
choice at the end of 2012 but to agree to tax increases because if they did not
compromise, all of the Bush-era tax rates would have expired.
While Republicans
want to avoid cuts to military spending, the thinking is that Democrats are
more eager to spare social programs from across-the-board reductions.
Whereâs
Obama?
So far, he is holding
fast to a âno negotiating without tax increasesâ position.
According to Bloomberg
and their national poll conducted on Feb. 15-18, Mr. Obama enters the Sequester
showdown with his highest job approval rating in three years and public support
for his economic message, while his Republican opponentsâ popularity stand at a
record low.
55% of Americans
approve of Obamaâs performance in office, his strongest level of support since
September 2009 while only 35% of the country has a favorable view of the Republican
Party, its lowest rating in this survey that began in September 2009. The Republican
party has slipped six percentage points in the last six months, the poll shows.
Some Democrats
are worried that Republicans will move a bill to simply restore the Defense
spending, putting the Democrats in a tough spot. That way, the argument goes,
the Republicans could either restore the Defense cuts, or blame Democrats and
the president for it, and in either case, still blame the economic stress
resulting from the domestic cuts on the president and the Democrats.
But, if Republicans had the votes to pass a bill that averts cuts in
defense, they would already have voted on that. The reason they didnât is either they do not have the
votes or know that the politics of dropping just the defense part of the Sequester
is bad for them.
Whereâs
Boehner?
Mr.
Boehner painted Mr. Obama with the blame brush for the Sequester on Wednesday in
the Wall
Street Journal:
week from now, a dramatic new federal policy is set to go into effect that
threatens U.S. national security, thousands of jobs and moreâŚThe president’s
sequester is the wrong way to reduce the deficit, but it is here to stay until
Washington Democrats get serious about cutting spending.
Is Mr.
Boehner against the Sequester? Sounds like it. He also comments on the Fiscal
Cliff deal:
president got his higher taxesâ$600 billion from higher earners, with no
spending cutsâat the end of 2012. He also got higher taxes via ObamaCare.
Meanwhile, no one should be talking about raising taxes when the government is
still paying people to play videogames, giving folks free cell phones, and
buying $47,000 cigarette-smoking machines.
Wow! This
sounds like a guy who has no intention of compromise.
But, in the
right-leaning Washington Examiner, Byron
York wonders if Mr. Boehnerâs WSJ article delivers the wrong message:
Boehnerâs argument is to make Obama seem reasonable in comparison. After all,
the president certainly agrees with Boehner that the sequester cuts threaten
national security and jobs. The difference is that Obama wants to avoid
them. At the same time, Boehner is contributing to Republican confusion
on the question of whether the cuts are in fact âdeepâ or whether they are
relatively minor.
Last week, Boehner
told the Associated
Press that the Sequester was a disaster that would present him and his
members with nothing but bleak options if it went into effect. He must know that
the Sequester is a political loser that won’t get the Republicans any leverage.
So why is he playing along?
Politico had a piece
on January 13th that indicated that GOP officials said more than
half of their members are prepared to allow default unless Obama agrees to the dramatic
cuts he has repeatedly said he opposes.
They quote an unnamed
GOP leadership adviser:
to get it out of their systemâŚWe might need to do that for member-management
purposes â so they have an endgame and can show their constituents theyâre
fighting.
It seems like Speaker
Boehner will let the Sequester kick in for âmember-managementâ purposes. So, Boehner
points a gun to his own head and says:
âBe
careful! When I blow my brains out, you Democrats are gonna get blood all over
your shirt!â