“No Good Choices”: Sequestration Is Here And Danger Lies Ahead
At midnight, $85 billion in federal budget funds will be sequestered (that is, held back) by the Treasury Department, with the potential to cause real pain for the economy and many Americans if Republicans and Democrats can’t agree to some sort of solution. (For an explainer about how this all came about, see here.)
The two sides are, naturally, quite far apart. The White House has offered a sequester replacement plan that it touts as “balanced” and thus ostensibly palatable to Republicans, though the administration is actually selling itself short: the plan should be quite appealing to the GOP exactly because it is unbalanced. The plan offers $930 billion in budget cuts with only $680 billion in revenue ($100 billion of which comes from Chained CPI, anathema to most progressives).
Republicans, meanwhile, want a sequester solution with no new revenue whatsoever—“The revenue issue is now closed,” House Speaker John Boehner said on Thursday—and many Republicans would like the sequester cuts rejiggered to spare defense spending and hit domestic and entitlement programs even harder.
So both sides are now playing the blame game, hoping that the public will get seriously angry about the disruptions caused by the sequester and blame the other side, thus bringing them to the table ready to give concessions.
There is substantial reason to be optimistic that Obama has the upper hand and will “win” this battle. The public appears to be on his side, and serious fractures within the GOP may soon emerge—defense hawks who cannot abide the Pentagon cuts much longer, and rationalists within the party who think the brand is being irreparably damaged.
But for progressives, is it really a win for Obama’s preferred approach to prevail? The emerging consensus is ‘no.’ Some of the cuts Obama offers are plain bad, like his offer to “reform” federal retirement programs and save $35 billion, which means in essence to take $35 billion from the pensions of public workers. Many cuts are inoffensive, and some are good cuts: like reducing certain agricultural subsidies and reducing Medicare payments to big drug companies.
The revenue would mainly be taken from the wealthy via capping deductions and closing loopholes that benefit top earners. But there’s that Chained CPI bit (or “superlative CPI,” as the White House refers to it) that really troubles progressives—and should. It represents a tangible cut to the safety net: seniors already living on $1,200 per month would see $1,000 less per year under the new formula. Disabled veterans would lose $1,400 per year, and middle-class taxes would be hiked on top of it. (The increased tax revenue is, I suppose, why the White House has classified Chained CPI as new revenue, but on the benefit side of Social Security and other programs, this is clearly a cut.)
Cutting entitlements for any reason is a no-go for many Democrats in Congress, especially when coupled with nearly a trillion dollars in budget cuts. That’s what would happen if Obama’s plan wins, and it’s what worries liberals. “There’s a broader concern about the fact that entitlements may get ensnared when we go to an alternative fix, [that] they won’t escape,” Representative Jerry Nadler told BuzzFeed.
The AFL-CIO issued a statement this week that didn’t back Obama’s “balanced” approach, but called for the sequester to be straight-up repealed. “There’s no need to replace the sequester in full or in part. We don’t need it. Republicans are saying we need to address the source of the problem as leverage to get entitlement cuts,” it read. The Congressional Progressive Caucus has also called for sequestration to be completely repealed.
That’s the best-case solution for progressives. (Realistically speaking, of course. The actual best-case solution is the comprehensive plan released by the Congressional Progressive Caucus.) But Boehner probably won’t be able to sell a full repeal of spending cuts in exchange for exactly nothing to his rambunctious hard-core caucus in the House. There might not be any deal to be had here.
In that case, sequestration stays in place. That’s definitely worse than repealing it, but is it really worse than Obama’s grand bargain? Under sequestration half of the cuts come from defense spending; Medicare is protected except for a 2 percent cut to doctor reimbursements, and Social Security, Medicaid, the Children’s Health Insurance Program and food stamp programs are protected entirely.
The other domestic cuts are no doubt painful and bad policy, but progressives have a tough choice in weighing that against what Obama’s proposing. And this of course assumes Obama gets everything he wants, which will not happen. Whatever bargain Congress and Obama strike out, if they manage to get something done, will almost certainly be worse.
There are real dangers to enacting some kind of bargain with Republicans to end the sequester—clearly on policy, but also on the politics, even though the administration seems to think otherwise. If White House aides truly believe that achieving a “grand bargain” that includes chained CPI will yield some sort of political victory, they ought to pay closer attention to the blame game now happening around the sequester.
One of Bob Woodward’s central claims, and the one that spurred the now-infamous pushback from the White House, is that Obama’s team came up with the sequester. This has been relentlessly pushed by Republicans (who invented a corny #Obamaquester hashtag) and by far too many mainstream media journalists.
This is plainly ridiculous—Obama wanted a clean debt-ceiling hike in 2011, and Republicans denied it and forced a showdown. Republicans were not enticed by what the White House offered to end the standoff and demanded some kind of guarantee of budget reductions, and at that point an administration official proposed sequestration as a tool. To strip that final piece of the timeline of all preceding context, and say that somehow Obama wanted the sequester, is exactly backwards—but it’s what is happening.
This is identical to what would likely happen to Chained CPI. Sure, this whole showdown was created by Republicans. And everyone understands the GOP to be the party that wants to cut “entitlement” programs. But Republicans have very deftly avoided proposing specific cuts to Social Security or Medicare in this debate; only Obama has with his Chained CPI proposal. Does anybody really think that two years from now, Republicans wouldn’t pull the exact same parsing of history as they did with the sequester, and blame Obama for cutting Social Security, which an overwhelming amount of Americans oppose? (Remember too that this is exactly what the Romney-Ryan ticket did with the $700 million in Medicare cuts included in the Affordable Care Act.)
In short, the sequester is a disaster, but a potentially worse disaster may lie ahead. There are no good choices here, only less-bad ones, and progressives should be wary about confusing political victory with a policy victory.
By: George Zornick, The Nation, March 1, 2013
“The Hostage Takers”: Blame Eric Cantor And Paul Ryan For The Sequester
John Boehner’s laughably weak leadership as House Majority Leader surely must be seen as being partly to blame for the sequester — the Tea Party caucus in Congress clearly has a tight leash on the Speaker.
But at least Boehner tried for a “Grand Bargain” with President Obama in 2011, only to be reined in by Eric Cantor and Paul Ryan, according to a recent interview Cantor conducted with The New Yorker‘s Washington correspondent, Ryan Lizza. Cantor admitted that there was a final meeting with Boehner, Ryan and himself where Boehner wanted to accept the president’s $1.2 trillion offer, but was talked out of it by Cantor and Ryan.
“The reason why we said no in that meeting, ‘don’t do this deal,’ was because what that deal was, was basically going along with this sense that you had to increase taxes, you had to give on the question of middle-class tax cuts prior to the election,” said Cantor. “And you knew that they had said they weren’t giving in on health care.”
So basically, this was about the 2012 election. Cantor and Ryan wanted to let the voters decide on taxes and health care instead of preempting it with the Obama-Boehner Grand Bargain. Then in November, the American public overwhelmingly voted for President Obama and his balanced approach to deficit reduction and growing the economy through a mix of spending cuts, tax revenues and closing corporate loopholes — a result that has been confirmed in repeated polls. The American people also doubled down on Obamacare by re-electing the president.
Cantor concluded the interview with Lizza with this telling remark: “That’s why we said, ‘Let’s just get what we can now, abide by our commitment of dollar-for-dollar, and we’ll have it out, as the president said, on these two issues in the election”.
The failure of the Grand Bargain resulted in the Budget Control Act of 2011, which included the automatic budget sequestration.
So it is now clear that Cantor and Ryan killed the Grand Bargain, leading to the sequester and the onset of European-style austerity and possibly another recession, and their basis for that was their supreme confidence that they would win the election. What is unclear is why, after their ideas were thoroughly rejected, they are defying the will of the American people and a popular president by refusing to compromise.
Could it be that they wanted this all along? Here is what Ryan said after the law putting the sequester in place was passed in August, 2011:
“What conservatives like me have been fighting for, for years, are statutory caps on spending, legal caps in law that says government agencies cannot spend over a set amount of money. And if they breach that amount across the board, sequester comes in to cut that spending, and you can’t turn that off without a supermajority vote. We got that in law. That is here.”
By: Josh Marks, March 1, 2013, The National Memo
“At The Urinals In The Bathroom”: Falling Into Bob Woodward’s Den Of Iniquity
When I got to my computer this morning and saw how many people were blathering about Bob Woodward, a wave of despair washed over me. First, because this is the kind of stupid argument from which we thought we could get something of a reprieve once the campaign ended, and second, because Bob Woodward himself, and the deference with which he is treated, just make me depressed.
It’s not that Woodward isn’t a good reporter, of a sort. But Watergate was pretty much the last time his reporting enhanced public understanding in a meaningful way. Woodward’s modus operandi since then has been to approach powerful people and convince them to tell their side of major events through him. Knowing that if they don’t, someone else will and they might come out looking bad, many of them give him their spin in great detail, which his books then pass on to a wide readership. They aren’t so much a record of events as a record of events as the people who talked to Bob Woodward would like us to see them. Nobody has done more than Woodward to elevate insiderism, the belief among many journalists that what matters isn’t the effect government has on people’s lives, but who said what to whom when, that if you can get the Secretary of State to tell you what he said to the National Security Advisor while they were at the urinals in the bathroom down the hall from the Oval Office, then you’re a hero of democracy.
I’m not saying there’s no value in that kind of reporting—we do want to know what policy makers are thinking, how they interact with each other, and so on. The mistake is to think it’s the only thing that matters. And I think that explains why Woodward is now finding himself at odds with the White House.
This whole thing started because Woodward had previously reported that the idea for the sequester originally came from the White House, in his last book. When the book was published it seemed like just one detail among many, but as we approached the sequester, Republicans decided that it was hugely important, making “Don’t blame us, it was all his idea!” their primary talking point, and citing Woodward again and again. Now the truth is that the question of who thought of it first is completely irrelevant; Republicans agreed to it and voted for it, so they can’t absolve themselves of responsibility for it, not to mention the fact that this all came about because of their hostage-taking, and we’re only in the position we are now because they refuse to compromise with Democrats. But now that important people in Washington were talking about a piece of information that came out of his reporting, Bob Woodward rushed to tell everyone that this piece of information is the most important thing to understand about this debate. After all, it was his scoop! And he got it by getting powerful people to tell him about their conversations with other powerful people. So that must be what matters.
When asked, he might have said, “Sure, I reported that the idea first came from the White House, but at this point, who cares?” Instead, he decided to wade in like he was auditioning for a job at the Daily Caller. He went on television to talk about this fantastic scoop of his. Then he wrote an op-ed charging that because the sequester itself doesn’t have tax increases in it, Obama is “moving the goalposts” by demanding that a deal to replace the sequester have at least some revenue in it, which is kind of like arguing that if yesterday we said we were going to have pizza for lunch today, but it turned out nobody wants pizza, you’re being unfair by suggesting sandwiches, because yesterday you had agreed to pizza. Then he poured contempt on Obama for not just breaking the law and having government do everything it was otherwise doing, regardless of the sequester (this is a variant of the most bizarre delusion currently gripping centrist Washington, that any problem could be solved if Obama would just “lead,” or maybe make a “firm presidential statement”).
Then after White House Budget Nebbish Gene Sperling yelled at Woodward about that op-ed, he gave an interview to Politico claiming Sperling had threatened him in an email. In fact, in the email Sperling apologized for yelling at Woodward, and the “threat” was this: “But I do truly believe you should rethink your comment about saying saying that Potus asking for revenues is moving the goal post. I know you may not believe this, but as a friend, I think you will regret staking out that claim. The idea that the sequester was to force both sides to go back to try at a big or grand bargain with a mix of entitlements and revenues (even if there were serious disagreements on composition) was part of the DNA of the thing from the start…” That’s some terrifying threatening, which is probably why Woodward replied, “You do not ever have to apologize to me. You get wound up because you are making your points and you believe them. This is all part of a serious discussion. I for one welcome a little heat; there should be more given the importance.” You can just smell his fear, can’t you?
Anyhow, Bob Woodward is very good at getting powerful people to tell him their side of a given story, when they might ignore similar requests from other reporters. The mistake is to assume that once you’ve gotten that, there isn’t much more to know. I’ll leave you with this, from Jonathan Chait, who argues persuasively that Woodward’s problem is that whatever his abilities as a reporter, he’s a terrible analyst:
To reconcile Woodward’s journalistic reputation with the weird pettiness of his current role, one has to grasp the distinction between his abilities as a reporter and his abilities as an analyst. Woodward was, and remains, an elite gatherer of facts. But anybody who has seen him commit acts of political commentary on television has witnessed a painful spectacle. As an analyst, Woodward is a particular kind of awful — a Georgetown Wise Man reliably and almost invariably mouthing the conventional wisdom of the Washington Establishment.
His more recent books often compile interesting facts, but how Woodward chooses to package those facts has come to represent a barometric measure of a figure’s standing within the establishment. His 1994 account of Bill Clinton’s major budget bill, which in retrospect was a major success, told a story of chaos and indecision. He wrote a fulsome love letter to Alan Greenspan, “Maestro,” at the peak of the Fed chairman’s almost comic prestige. In 2003, when George W. Bush was still a decisive and indispensable war leader, Woodward wrote a heroic treatment of the Iraq War. After Bush’s reputation had collapsed, Woodward packaged essentially the same facts into a devastating indictment. Woodward’s book on the 2011 debt negotiations was notable for arguing that Obama scotched a potential deficit deal. The central argument has since been debunked by no less a figure than Eric Cantor, who admitted to Ryan Lizza that he killed the deal.
By: Paul Waldman, Contributing Editor, The American Prospect, February 28, 2013
“Sequestration Stupidity”: By All Measures, Austerity Policies Are An Unmitigated Disaster
A Mediterranean diet, the New England Journal of Medicine reported Monday, can lengthen one’s lifespan. So inhabitants of southern Europe can look forward to long lives — of anxiety and privation.
Already mired in a depression comparable to that of the 1930s, Spain, Greece and Portugal are going to see things grow worse this year, according to an annual economic forecast released by the European Commission on Friday. Unemployment rates in both Spain and Greece — where a quarter of the populations are unemployed and the share of jobless young people exceeds 50 percent — will rise to 27 percent.
At least the leaders in power in 1930 had an excuse when the economy began to collapse. Then, there was genuine bewilderment among economists and governmental chieftains across the political spectrum about how to induce a recovery. From British Laborite Ramsay MacDonald to the German centrist Heinrich Bruning to American conservative Herbert Hoover, leaders cut spending to bring their budgets into balance.
These austerity policies proved an unmitigated disaster. By reducing government spending while business and consumer spending were tanking, these heads of government constricted all economic activity. In turn, unemployment continued to soar. Frustrated with the inability of mainstream political parties to stop the collapse, voters in some nations turned to extremes — most notably, of course, in Germany.
Unlike their predecessors, today’s leaders have models on how to revive depressed economies. The example of Franklin Roosevelt, whose public investments in jobs and defense turned the U.S. economy around, and the writings of John Maynard Keynes, who demonstrated that the solution to depression is boosting demand, are plain for all to see. Seeing isn’t believing, however, when ideology dims the eye.
Today, in the spirit of the Bourbon kings who reclaimed power in post-Napoleonic France, having learned nothing during their years in exile, many European leaders are repeating the mistakes that their predecessors made in the ’30s: demanding that governments reduce spending even as their private-sector economies limp along. Only this time around, the miracle of the euro has greatly the reduced the autonomy of many continental nations while giving their creditor, Germany, control over their destinies. German Chancellor Angela Merkel is imposing austerity budgets on other nations, even Spain, which had a string of balanced budgets before the 2008 collapse.
The economies of Mediterranean nations, the Merkelites complain, lag behind the productivity rates of their northern European neighbors. But boosting productivity — a goal that everyone embraces — requires more, not less, public investment in worker training, education, new industries and unemployment support. The relationship between austerity and heightened productivity, whose existence Merkel continually proclaims, is real enough — but in Europe’s current economy, the association is inverse.
As in the 1930s, despair about the economic options before them has driven many voters to bizarre extremes. A quarter of Italian voters cast ballots this week for the anti-austerity xenophobic party of a professional comedian. In Spain, a movement for Catalonian separatism is growing. More ominously, in Greece, an avowedly racist, fascist party involved in numerous instances of violence has won a bloc of seats in parliament. You might think Merkel would be cognizant of the links between economic hopelessness and the rise of fascism — but if she is, it hasn’t affected her austerity economics by so much as a pfennig.
The euro zone isn’t the only part of Europe where austerity is turning out to be a disaster. Britain is the one European nation that, since Prime Minister David Cameron’s conservatives came to power in 2010, has deliberately opted for punishing austerity to bring its budget into balance. As a result, the British economy has slowed to a crawl, and its budget remains in the red. Last week, Moody’s stripped Britain of its AAA credit rating. In anti-Keynesian theory, austerity economics are supposed to protect one’s triple-A rating, not endanger it. So much for anti-Keynesian theory.
The United States isn’t immune to Europe’s madness. The sequester slated to begin taking effect Friday is a particularly mindless form of an already stupid policy, poised to inflict a kind of blindfolded austerity at a time when unemployment remains high. Republican opponents of government spending, not to mention tea party activists, like to think of themselves as true-blue Americans while disparaging the Democrats as Euro-socialists. But it’s the Republicans who are embracing Europe’s failed economics while Democrats attempt to adhere to the American success story of the New Deal. Republicans might want to bone up on American history; it contains all kinds of valuable lessons.
By: Harold Meyerson, Opinion Writer, The Washington Post, February 26, 2013
“Ending The Permanent Crisis”: These Problems Are Really Republican Problems
This has to stop.
Ever since they took control of the House of Representatives in 2011, Republicans have made journeys to the fiscal brink as commonplace as summertime visits to the beach or the ballpark. The country has been put through a series of destructive showdowns over budget issues we once resolved through the normal give-and-take of negotiations.
The old formula held that when government was divided between the parties, the contending sides should try to “meet in the middle.” But the current Republican leadership doesn’t know the meaning of the word “middle,” so intimidated by the tea party has it become.
Here is a way out of permanent crisis: President Obama should demand the repeal of all artificial deadlines and tell both houses of Congress that he won’t make further proposals until each actually passes a replacement to the sequester — not a gimmick or something that looks like an alternative, but the real thing.
With everyone on the record, normal discussions could begin, and Washington would no longer look like the set of a horror movie in which a new catastrophe lurks around every corner.
The solution to the problems of democracy is more democracy, so let both houses hold votes on all the potential remedies — on Obama’s own proposal, on packages put forward by Democrats Chris Van Hollen in the House and Patty Murray in the Senate, and on anything the Republicans care to proffer, including the sequester itself.
Let the House Republican majority show that it can come up with a substantial alternative or, failing that, allow a plan to pass with a mix of Republican and Democratic votes.
In the Senate, ditch the unconstitutional abuse of the filibuster and let a plan pass by simple-majority vote. Misuse of the filibuster is a central cause of Washington’s contorted policymaking. Let’s end the permanent budget crisis by governing ourselves though the majorities that every sane democracy uses.
The air of establishment Washington is filled with talk that Obama must “lead.” But Obama cannot force the House Republican majority to act if it doesn’t want to. He is (fortunately) not a dictator.
What Obama can do is expose the cause of this madness, which is the dysfunction of the Republican Party.
Journalists don’t like saying this because it sounds partisan. But the truth is the truth, whether it sounds partisan or not.
And a staunch conservative has succinctly explained why this problem really is a Republican problem. In an admirably candid interview Monday with Ezra Klein on MSNBC, Ben Domenech, a conservative blogger, said the new tea party Republicans in the House don’t want their leadership to sit down with Obama to talk because “they have their doubts about the ability of Republicans to negotiate any better situation.”
Read that carefully: We are in this mess because Republicans don’t trust their leaders to bargain. Domenech added that many conservatives “don’t buy this distinction between smart cuts and dumb cuts,” a distinction that is not “all that critical.” This is astonishing: Government is bad, so all cuts are more or less the same. And you wonder why we have a crisis?
House Speaker John Boehner keeps saying that the House has twice voted for ways to replace the sequester. What he doesn’t say is that those votes were held in the last Congress, so the bills are dead. If they are so good, why doesn’t the speaker bring them up again and pass them now? The answer is almost certainly that he doesn’t have the votes. If I’m wrong, Boehner can prove it by calling the question. I’m not worried.
One proposal Republicans are floating would give Obama more flexibility to administer the sequester. Thus, a party that says it can’t trust Obama enough to negotiate with him would trust him so much as to grant him exceptional power.
The contradiction is so glaring that Republicans are split on the idea, and it’s foolish anyway. As a senior administration official suggested, it’s like being told that two of your fingers will be cut off but you could choose which fingers. How is it a “concession” to ask Obama to organize the cuts he says would be a disaster?
The nation is exhausted with fake crises that voters thought they ended with their verdict in the last election. Those responsible for the Washington horror show should be held accountable. And only one party is using shutdowns, cliffs and debt ceilings as routine political weapons.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, February 27, 2013
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