Sequestration 2013: An Inside Look At This Budget Debacle

Washington, D.C. has finally agreed upon something  the sequester, across-the-board spending cuts set to go into effect on March 1, is a bad idea. In his State of the Union speech, President Obama told Congress that "[the sequester] would certainly slow our recovery and cost us hundreds of thousands of jobs," while John Boehner wrote in a Wall Street Journal editorial that "[sequestration] threatens U.S. national security, thousands of jobs and more." This newfound comity does not extend very far, however, as both political parties insist that the other is to blame for sequestration. In his editorial, Boehner calls sequestration "a product of the president's own failed leadership," while the president insists that Republican intransigence is to blame for the looming cuts.

As per usual in politics, both sides are to blame. Unfortunately, however, in a pattern which has become depressingly common in recent years, Republicans deserve the lion’s share of the condemnation . Although the phrase "business as usual" has become a political slur, the sequester would never have happened if "business as usual" were actually occurring in Washington. It was created by the Budget Control Act, the legislative compromise which ended 2011’s debt ceiling crisis. The compromise traded a debt ceiling increase of $1.2 trillion for $400 billion in immediate spending cuts and $500 billion in additional cuts over ten years. It also created the so-called "super committee" to recommend $1.5 trillion in spending cuts, with the sequester going into effect if the committee failed to come up with them. The super committee did indeed predictably fail, and America is now stuck with the sequester – mindless spending cuts which slash every government agency's buget regardless of merit and totally fail to address the entitlement programs which actually cause America’s long-term deficit.

The Obama White House bears some responsibility for sequestration. As documented by Bob Woodward, the White House proposed the idea during negotiations when both sides were searching for an automatic trigger that would force the super committee to act. Ultimately, though, sequestration is fundamentally the result of the Republican Party’s failed approach to governance since winning control of the House of Representatives in the 2010 midterm elections. They attempted to run the government from the House, a strategy which failed for Newt Gingrich in the 1990s and failed again when used against President Obama. The only reason the sequester was proposed by the White House was because they were in a situation where the alternative was national default on our obligations, which would sent the economy into a tailspin while making treasury bond yields skyrocket. During a Republican retreat in Baltimore, Eric Cantor referred to the debt ceiling crisis as "a leverage moment when the White House and President Obama will have to deal with us." The White House did indeed deal with the Republicans, and that deal gave us the sequester. The idea may have originated with the President, but it became a reality thanks to the 112th Congress and their disastrous legislative strategy.

As the sequester looms only a few days away, Republicans are now faced with a choice. Currently, they are refusing to blink on offsetting sequestration with tax increases and are instead advancing an unpopular proposal which replaces the cuts to defense spending with even deeper cuts to social programs. This is the same kind of legislative brinksmanship that led to the sequester, and refighting the battles of 2011 against a president who is more popular than he was then will only result in another legislative defeat and give Democrats ammunition to use in the 2014 midterms.

Instead, Republicans should advance an alternative to the sequester which reduces the immediate harm to the economy while actually addressing the causes of America’s deficit. The cornerstone of this proposal would be changing Social Security’s cost-of-living increases from their current antiquated measurement to the Chained CPI system, an adjustment which would save $225 billion over ten years. Additionally, the Republican alternative would raise revenue, though by eliminating or capping some tax deductions, rather than raising effective tax rates. The remaining spending cuts should be adjusted so that they are merit-based, rather than mindless; wasteful programs like farm aid and energy subsides (to fossil fuel and alternative energy companies alike) should be cut deeper than well-managed agencies like the FBI and National Parks Service.

The Pentagon cuts themselves should be specified further by the sequester, so as to have minimal effects on immediate military readiness and instead cut long-term defense spending that can be later restored in the traditional appropriations process. This alternative would not be perfect, but it would be politically palatable while making a firm statement about the GOP’s approach to public policy  namely, that they are willing to raise revenue and are serious about entitlement reform while simultaneously understanding the dangers of immediate, draconian cuts to discretionary spending. Once this alternative program is advanced, the Republicans should enter into negotiations with the White House. The GOP has to be willing to accept parts of the White House plan in exchange for implementing some of the Republican plan.

While it will be anathema to conservative diehards, this compromise proposal is the Republican Party’s best shot for regaining some popular support in the sequestration debate. Otherwise, the spending cuts will happen, people will be harmed by them, and Democrats will remind voters in 2014 that the only reason their favorite programs were cut is because Republicans were being their typical obstructionist selves. Unless there is an alternative to this narrative, those angry voters will put House Republicans on the receiving end of the shellacking that swept them into power in 2010.