“The Message Was Crystal Clear”: On The Sequester, The American People “Moved The Goalposts”
I don’t agree with my colleague Bob Woodward, who says the Obama administration is “moving the goalposts” when they insist on a sequester replacement that includes revenues. I remember talking to both members of the Obama administration and the Republican leadership in 2011, and everyone was perfectly clear that Democrats were going to pursue tax increases in any sequester replacement, and Republicans were going to oppose tax increases in any sequester replacement. What no one knew was who would win.
“Moving the goal posts” isn’t a concept that actually makes any sense in the context of replacing the sequester. The whole point of the policy was to buy time until someone, somehow, moved the goalposts such that the sequester could be replaced.
Think back to July 2011. The problem was simple. Republicans wouldn’t agree to raise the debt ceiling without trillions of dollars in deficit reduction. Democrats wouldn’t agree to trillions of dollars in deficit reduction if it didn’t include significant tax increases. Republicans wouldn’t agree to significant tax increases. The political system was at an impasse, and in a few short days, that impasse would create a global financial crisis.
The sequester was a punt. The point was to give both sides a face-saving way to raise the debt ceiling even though the tax issue was stopping them from agreeing to a deficit deal. The hope was that sometime between the day the sequester was signed into law (Aug. 2, 2011) and the day it was set to go into effect (Jan. 1, 2013), something would change.
There were two candidates to drive that change. The first and least likely was the supercommittee. If they came to a deal that both sides accepted, they could replace the sequester. They failed.
The second was the 2012 election. If Republicans won, then that would pretty much settle it: No tax increases. If President Obama won, then that, too, would pretty much settle it: The American people would’ve voted for the guy who wants to cut the deficit by increasing taxes.
The American people voted for the guy who wants to cut the deficit by increasing taxes.
In fact, they went even further than that. They also voted for a Senate that would cut the deficit by increasing taxes. And then they voted for a House that would cut the deficit by increasing taxes, though due to the quirks of congressional districts, they didn’t get one.
Here in DC, we can get a bit buried in Beltway minutia. The ongoing blame game over who concocted the sequester is an excellent example. But it’s worth remembering that the goalposts in American politics aren’t set in backroom deals between politicians. They’re set in elections. And in the 2012 election, the American people were very clear on where they wanted the goalposts moved to.
By: Ezra Klein, The Washington Post, February 23, 2013
“More Republican Denial”: This Time, The People Are On To The GOP
Whose “idea” was the sequester, and why should it matter? My Twitter feed these last couple of weeks has been overflowing with people going beyond the usual “communist” and “idiot” name-calling that I get every day and throwing the occasional “liar” in there because I “withhold” the information that the sequester was the Obama administration’s idea. Very well, consider that nugget hereby unwithheld. Let’s grant that this is true. But it’s true only because the Republicans were holding a gun to the administration’s head—and besides, the Republicans immediately voted for it. In any case the important thing now is that outside of Fox News land, it’s an unimportant fact whose “idea” it was. The Republicans are partial owners of this idea, and as the party that now wants the cuts to kick in, they deserve to—and will—bear more responsibility for the negative impacts.
A trip back through the full context of this saga tells the story. The idea of having these deep budget cuts called “sequestration” goes back to the summer of 2011 and the debt-ceiling negotiations. You’ll recall readily enough that it was first time in history that an opposition party had attempted to attach any conditions to increasing the debt limit. You’ll also recall that the Republicans made this intention quite clear from the beginning of 2011; indeed, from campaign time the year before. Remember Obama’s quotes from late 2010 in which he said he felt sure the Republicans would behave more reasonably once the responsibility to govern was partly theirs?
Instead, they almost crashed the economy. And they were also clearly the side pushing for drastic spending cuts. Let’s go back quickly over a partial 2011 timeline. In April, Obama spokesman Jay Carney said it was the president’s position that raising the debt limit “shouldn’t be held hostage to any other action.” On May 11, Austan Goolsbee, then Obama’s chief economic adviser, said that tying a debt-limit increase to spending cuts was “quite insane.”
On May 16, the United States went into technical default, but the Treasury Department was able to string things along a few more weeks. Tim Geithner made it clear that the real problem would hit August 1. A key moment, as Scott Lilly of the Center for American Progress wrote in The Huffington Post, came on May 31. That’s when the GOP-run House voted on Obama’s request for a “clean” debt-limit increase. It failed, and all 236 Republicans voted no.
All this time, and right on up to August 1, Republicans were screaming for deep budget cuts, and the administration was saying no. But the Republicans had the leverage because it actually seemed plausible they were crazy enough to push the country into default. And so at that point, at least according to Bob Woodward in his new book, Jack Lew, then the budget director and now Obama’s nominee for Treasury secretary, originally came up with the notion of sequestered cuts. Or maybe it was Gene Sperling. The White House’s idea was based on language from the 1985 Gramm-Rudman-Hollings deficit-reduction act. It was also the White House’s notion that if the “trigger” was hit, what would kick in would be not only automatic budget cuts but also automatic revenue increases (an idea Republicans refused to go along with).
So fine, the White House proposed it. It did so only after months of Republicans publicly demanding huge spending cuts and refusing to consider any revenues and acting as if they were prepared to send the nation into default over spending. In other words, this was the administration’s idea in much the way that it’s a parent’s “idea” to pay ransom to a person who has taken his child hostage. There was a gun to the White House’s head, which was the possibility of the country going into default.
And then, when it was all put into legislation, it was the Republicans who passed the Budget Control Act of 2011 in the House, with 218 of them voting yes. So even if administration officials proposed it, it would have remained just a proposal if those 218 Republicans hadn’t supported it (no House Democrats backed it). Most Republicans agreed at the time that the sequestration trigger was a good thing—that it would force everyone to get together and agree to a path forward and a long-term budget deal.
Let’s say that I’m having a dispute with a neighbor I don’t really like or trust about some invasive weeds infesting both of our properties. We consider a range of options and then finally he proposes a solution that isn’t very appetizing to either of us—it’s expensive, might kill a lot of grass, say, or a couple trees. It’s not exactly desirable to either of us, but I endorse his suggestion and share the costs of implementation of his plan. If it ends up killing grass or trees, am I really then on firm moral ground in pointing my finger and saying, “Hey, it was your idea, bub”?
I guess maybe conservatives think that way, but of course I don’t. I assented to the plan. I share responsibility for the consequences. Where my little analogy collapses is that in my hypothetical, my neighbor and I are more or less equally affected by the negative outcome. The Republicans’ ace card is that they know, or they hope they know, they are not equally affected. Austere cuts will harm the economy, and the blame will fall on the president.
Normally yes. But the majority of the people are onto them. And it sure isn’t going to be looking very responsible to people, as the March 1 sequestration deadline approaches, for Republicans to be going before the cameras and saying that the cuts are unfortunate but necessary medicine, or whatever formulation they come up with. They’ve wanted these spending reductions for two years. It hardly matters much who invented the mechanism for the cuts. What matters, as the Republicans will find out, is that the people don’t want them.
By: Michael Tomasky, The Daily Beast, February 19, 2013
“Seniors Take Note”: Republicans Effectively Confessed To Having Mislead Conservative Members Who Now Must Be Mollified
I’m not sure House Republicans realized how large an error they made by kidnapping and then releasing the debt limit earlier this year. By admitting their bluff, they effectively confessed to having misled conservative members, and those members needed to be mollified.
That created a new problem: How could they appease conservatives while lacking the power to satisfy any of their substantive demands? So they offered up grandiose symbolism: A raincheck on the brinksmanship (the current fight over the sequester) and a promise to pass a budget that would wipe out the deficit in 10 years if enacted.
But it’s not clear that they counted their votes, or considered the budget math when they made that promise.
“We are saying a 10-year balance — that’s tougher than the last [Paul] Ryan budget,” Rep. Mike Simpson (R-ID), a former Budget Committee member told Politico.
“There could be a significant number of Republicans that say, ‘I’m not going there because it would be too dramatic.’ I have said to my constituents, nobody is talking about changing Social Security and Medicare if you’re 55 years or over.’ I’ve been selling it for three or four years that way. So have many other members. Well, to balance in 10, that 55 years is going to move up to 58, 59, 60. It makes us look like we’re going back on what we were telling people when we were trying to sell this.
We haven’t seen Ryan’s latest budget, so we don’t know what precise ratio of funny math and concessions to reality he’ll use to make the numbers work. And until he’s written it he won’t offer many hints.
But we do know a couple things. First, given Republicans’ famous preference for never increasing taxes or cutting defense spending, we know that it’s probably impossible for them to draft a budget that balances in 10 years without eating into entitlement benefits for people older than 55. Second, per above, we know that GOP leaders promised conservatives a budget that balances over 10 years to win their support for increasing the debt limit. So either Ryan will produce a budget that relies on sleight of hand more than his previous budgets did, or he’ll have to admit that the GOP’s pledge to leave retirement programs untouched for people over 55 was neither sincere nor sustainable.
As Simpson’s quote suggests, that’ll make it harder for Republicans to pass a budget at all; and if they do, it’ll come at a potentially enormous cost with their voting base.
By: Brian Beutler, Talking Points Memo, TPM Editor’s Blog, February 15, 2013
“Ill Omen”: The Country Has A Confidence Problem And It’s Congress’s Fault
The country has a confidence problem, and Congress bears much of the responsibility for it.
That conclusion, drawn by Republican pollster Bill McInturff, carries ill omens as lawmakers seem all but certain to let more than $1 trillion in automatic spending cuts go into effect at the end of the month and with fights over keeping the government funded and raising the debt ceiling looming.
“It is clear we have entered a new phase where the dysfunction and paralysis in Washington is having a significant and deleterious impact on how consumers feel about the overall state of the economy and their personal financial situations,” writes McInturff in an analysis entitled “The Washington Economy.”
As evidence of his assertion, McInturff cites the Michigan Consumer Sentiment Index in the months leading up to the “fiscal cliff” fight last winter. From October to December, consumer confidence dipped from 82.6 to 72.9. (The Michigan Index is based on a 100-point scale.) McInturff notes that the index typically moves only a point or two a month, and that such large-scale moves within such a short time typically require a “signal event” like Hurricane Katrina (a 19.6-point drop in two months), Iraq invading Kuwait (15.4-point drop) or the Lehman Brothers collapse (15-point drop).
The “fiscal cliff” debate (a 9.7 point drop) and the 2011 debt ceiling showdown (15.8) fit neatly into that category of signal events, a remarkable reflection of how what happens — or, more accurately, doesn’t happen — in Washington reverberates around the country. (One remarkable factoid: The drop in consumer confidence during the “fiscal cliff” debate was larger than the one that followed the Sept. 11, 2001, terrorist attacks.)
The Michigan Index is not alone in showing the drastic impact on confidence that the seemingly endless fiscal fights in Washington are causing. In the summer of 2011 — at the heart of the debt ceiling debate — Gallup’s Economic Confidence Index showed a score of -54. (The lowest possible number is -100, the highest is 100.) At the end of 2012, confidence dipped again in the Gallup measurement — down to -22.
Now, it’s not all doom and gloom. Of late, the Michigan Index has been showing increased public confidence, hitting a three-month high of 76.3 this month. And, the Gallup number reached as high as -8 earlier this month —a five-year high— before dipping back down to -13 last week.
But, a look at the longer trend suggests that the country is in the grips of a broader crisis of confidence that Washington is making worse. Looking all the way back to 2008 when Gallup began testing economic confidence, the organization has never — repeat, never — turned out a positive confidence score in its daily tracking polling. And, as McInturff notes, the country is now in the midst of a historically long run of low confidence. It has been 59 months since the Michigan Index dropped below 65 and it has never been back above 85. That’s the longest recovery period of any time since World War II; in 1974, amid the Watergate scandal, the Michigan Index dropped below 65, but 30 months later it was over 85 again.
Then consider that the sequester seems all but certain to kick in on March 1, the potential for a government shutdown on March 31, and the debt ceiling debate returning later this summer and it seems clear that the current bump in confidence is likely to be short-lived. Put another way: We may well be in the eye of an economic confidence hurricane.
What’s clear from all the data is that a federal government that lurches from financial crisis to financial crisis as its normal course of business is doing a great disservice to a country badly looking to finds its footing again.
“It is important leaders in both parties begin to recognize how the tenor, tone and the outcome of the policy debates in Washington are actually retarding economic confidence in a way that makes building a sustained recovery more difficult,” concludes McInturff.
The warnings, from the debt ceiling fight through the “fiscal cliff” crisis, are clear. But, political Washington has shown a remarkable inability to heed them in the past few years. If that doesn’t change in the next three months, the impact on the nation’s economy could be drastic.
By: Chris Cillizza, The Washington Post, The Fix, February 17, 2013
“Weather Vane Man”: Tracking Paul Ryan’s 5 Different Positions On The Sequester
House Republicans are attempting to blame Democrats and President Obama for “sequestration,” the automatic budget cuts that will begin taking effect on March 1 if Congress fails to avert them. But even as they cast that blame and ignore their own role in creation of the sequester, which wouldn’t exist had Republicans not refused to raise the debt ceiling in August 2011, Budget Committee Chairman Paul Ryan (R-WI) is expected to count the sequester’s automatic cuts in the next version of his budget, BuzzFeed reports:
According to two senior GOP aides familiar with Ryan’s thinking on the budget, the Wisconsin Republican and former vice presidential candidate will use the so-called sequester as part of the baseline level of spending for his budget.
Ryan’s position on the sequester has changed multiple times:
1. Helped make the sequester happen. Ryan was among the Republicans leading demands for spending cuts to offset a debt ceiling increase in the summer of 2011, and was among the leaders who refused to consider new revenues in those negotiations. Had Republicans not refused to raise the debt ceiling in the first place, the sequester wouldn’t exist.
2. Voted for plan to create the sequester, then bragged about it. Ryan took credit for the sequester in August 2011, bragging to Fox News that it guaranteed the massive budget cuts Republicans were seeking. “We got that in law,” he boasted. On the House floor, he said the Budget Control Act’s spending cuts were “a victory for those committed to controlling government spending.”
3. Called the sequester “devastating” during the presidential election. Ryan blasted Obama for wanting the sequester’s “devastating defense cuts” to take place during the presidential election, when he was the GOP’s vice presidential candidate.
4. Blamed the likelihood of the sequester occurring on Obama. The sequester “will probably occur” because “the president has not a proposal yet on the table,” Ryan told CBS News last week. “Don’t forget it’s the president who first proposed the sequester. It’s the president who designed the sequester as it is now designed,” he added.
5. Will include sequester cuts in his latest budget.
This is hardly a new strategy for Ryan, who crisscrossed the country blasting Obama for cutting Medicare spending even as he included the cuts in his last budget proposal and made even bigger changes to the program.
By: Travis Waldron, Think Progress, February 15, 2013
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