After a near-default on the public debt and a fiscal cliff that threatened a new recession, we are facing another man-made crisis: the sequester, across-the-board cuts in discretionary domestic and defense spending that are set to begin Friday and extend over a decade. Identifying the origins of the sequester has become a major Washington fight.
Bob Woodward weighed in recently with a Washington Post op-ed making the case that the idea began in the White House.
If you look before and after, a different picture emerges. In our view, what happened is quite straightforward: In , House Republican leaders used their new majority to force their priorities on the Democratically controlled Senate and the president by holding the debt limit hostage to demands for deep and immediate spending cuts.
The sequester was designed to be so potentially destructive that the supercommittee would surely reach a deal to avert it. Smith Republicans insisted on a trigger for automatic cuts; Jack Lew , then the White House budget director, suggested the specifics, modeled after a sequester-like mechanism Congress used in the s, but with automatic tax increases added. Republicans rejected the latter but, at the time, took credit for the rest. Obama took the deal to get a debt-ceiling increase.
But the president never accepted the prospect that the sequester would occur, nor did he ever agree to take tax increases off the table.
At least the automatic cuts will reduce runaway spending and begin to control the deficit. What runaway spending? Under current law not including the sequester, non-defense discretionary spending as a share of the economy will shrink to a level not seen in 50 years. Defense spending grew substantially over the past decade, but that pattern has slowed and will soon end.
Additional reductions must be achieved intelligently, tied to legitimate national security needs. Rob Portman. John Kerry. Pat Toomey. These six senators from both parties, along with six members of the House of Representatives, are the people to blame for the sequestration cuts scheduled to hit the federal budget beginning Friday.
And yet in the energetic round of finger-pointing that has consumed Washington in recent days, their names have hardly been mentioned. It was their failure to come together that created the current mess. Today, Republicans are focused on pinning sequestration on President Obama, who came up with the idea , while Obama has pointed the finger at Congress, which voted for it on an overwhelming, bipartisan basis.
But that's silly. Nobody who "agreed" to sequestration actually wanted it to happen. In classic Washington fashion, they thought they could assign the hard work to somebody else and get them to do it.
They were wrong. The supercommittee was supposed to forge the deal that Obama and House Speaker John Boehner could not in their July debt-ceiling talks. It was this hypothetical future deficit reduction that got Republicans, grudgingly, to agree to raise the debt limit.
Sequestration -- automatic cuts to defense and discretionary spending -- was to be the punishment if the supercommittee could not come up with a plan. The cuts were designed to be as clumsy and inflexible as possible, in order to motivate lawmakers to come up with a better approach. That's why agency heads have very little discretion on which programs are hit by the cuts: They were designed to inflict maximum suffering on both parties' priorities, with little wiggle room to mitigate the pain.
However, with a Super Committee failure expected to be official very shortly, it is important that Congress leave Plan B in place rather than overriding it for three main reasons:.
Of course, relying on the sequester for savings is not at all ideal policy, but it can help force lawmakers to act. We need to enact smart reforms that improve economic incentives to work, save, and invest. We elaborated on this two weeks ago after some lawmakers suggested turning off or weakening the sequester. But what would be much better than just keeping the current sequester in place would be for Congress to quickly enact a Go Big comprehensive fiscal plan or, assuming that's too much to ask in the next month, strengthen the current sequester -- either through additional automatic savings or debt caps as proposed by the Peterson-Pew Commission -- to help put a fiscal plan in place.
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