Well, hello sequester

The first of March is sequester day in Washington. By the end of the day – that’s 4pm Saturday, Melbourne time – Barack Obama has to issue the orders that begin the process of cutting $85 billion this year from US government spending, shared equally between military and civilian sectors. Congress adjourned yesterday without reaching any sort of agreement (the Guardian rather mischievously liveblogged the non-event), ending the already slim prospect that a deal would be done to avoid the sequester going into effect.

Personally, I regard this as a good outcome. Cutting spending is good and necessary, and I think it’s particularly important to demonstrate that the military can be cut significantly without hurting American security. There may be some short-term pain, but the most sensitive sorts of spending, on welfare, health care and social security, are insulated from the sequester cuts.

Ideally, cuts would be made in a more sensible and less broad-brush fashion. There’s plenty of money out there; social security could be means-tested, farm subsidies could be eliminated, dozens of obsolete military bases could be closed. But most of those things are still regarded as politically impossible.

Obama has repeatedly offered an agreement to avert the sequester, but he insists that part of that must involve revenue increases – by closing tax loopholes, not by increasing rates. The Republicans respond that they support closing loopholes (although it’s not clear that most of them really do – Jon Chait argues that “Republicans in Congress just want rich people to pay less, period”), but that the resulting revenue should be used to cut tax rates.

That’s a perfectly reasonable position, but it’s difficult to reconcile with the idea that the deficit is an immediate, overpowering emergency – which Republicans also claim to believe. If things are really so dire, surely a short-term revenue increase would be a legitimate part of the effort to fix it?

Whatever its merits as policy, Obama’s stance has tremendous political strength. Publicly he opposes the sequester, but having it in operation is a better outcome for him than anything that the Republicans have showed themselves remotely likely to agree to. And if its effects bite on the economy, that will just put more pressure on the Republicans to return to the table – including pressure from within the party, as Timothy Noah argued last week.

From the point of view of Republican speaker John Boehner, under fire from hardliners in his own caucus, the main priority is to avoid being seen to give in to the president. Even though a deal made under pressure may not be as good for Republican policy as what’s on offer now, it will play better politically with those who are just fanatically anti-Obama. As Chait puts it,

He has to show the ultras he’ll fight. If the GOP takes a major hit in the process, which it almost surely will, then he’ll have an internal rationale to compromise. Boehner is marching his party into war because the guns facing his troops are less dangerous to him than the ones pointed at his own back.

So it looks as if nothing will be resolved between now and the next major deadline: 27 March, when the continuing resolution that authorises government appropriations runs out. Stay tuned.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.