In Washington, folks are celebrating a new bipartisan budget deal that saves us from another full round of reductions in federal spending mandated by the “sequester.” Far fewer are lamenting the dwindling of the sequester itself. As usual, Washington has things upside down.
The budget agreement was merely a necessity, caused by a revolt of House Republicans on the Appropriations and Armed Services committees. Without their votes, the sequester became unsustainable, even in the GOP-controlled House. Democrats never liked it. Thus a big chunk of its across-the-board cuts had to be replaced. At least that was the explanation for doing so.
The sequester, in contrast, is an anomaly of modern government, a historic achievement in shrinking the size of Washington. It “reduced government spending for two years in a row for the first time since right after the Korean War,” Senate minority leader Mitch McConnell insisted last week. “Many of us came to Congress to do just that.”
Let’s put this achievement in context. Phil Gramm and Warren Rudman enacted a plan to restrain spending, Jimmy Carter embraced zero-based budgeting, Ronald Reagan championed spending cuts, Newt Gingrich produced reductions as House speaker, Bill Clinton presided over a balanced budget. Yet none of them imposed fiscal discipline matching what the sequester accomplished in two years and promised to continue over the next eight—to the tune of $1 trillion in reduced non-entitlement spending.
The sequester has the virtue of actually working. The cuts go into effect annually. In 2013, $84 billion was that year’s share of the overall reductions. And $84 billion in cuts were enforced. If the usual practice had been followed, the $84 billion reduction would have been spread over 10 years and much or all of it never imposed.
For beleaguered Republicans in Congress, the sequester provided a political bonus. It gave them leverage in dealing with President Obama and Senate Democrats. The sequester’s cuts are automatic, which means neither action by Congress nor the president’s signature is needed annually. And relief from its spending caps is impossible without the acquiescence of Republicans.
Relief is what Obama, the spender-in-chief, desperately wants. The sequester has already slashed domestic programs he cherishes and slaps a death warrant on his plans to devote untold billions to grandiose projects such as universal pre-K education and a national network of “manufacturing innovation centers.”
But Obama doesn’t come to the sequester issue with clean hands. Its author, during budget negotiations in 2011, was Obama’s budget director Jack Lew (now Treasury secretary). It was meant to force a congressional super-committee to agree to a package of spending cuts and tax hikes—or else the sequester would take over. They failed and it did.
The sequester rattled Obama. He claimed the idea came from Congress, only later conceding it was indeed a product of White House brainstorming. At one point, he threatened to veto any bill tampering with the sequester. Then he switched to denouncing it as an impediment to economic growth. “At a time when too many Americans are still looking for work, it’s inexcusable,” he said in May.
Once defense-minded Republicans began protesting the disproportionate cuts in the military, Obama shamelessly took up that argument as well. This was breathtaking in its hypocrisy, since Obama’s own cuts are far more responsible for starving Pentagon spending than the sequester is.
It was the defection of Republicans, led by chairman Buck McKeon of the Armed Services Committee, that shattered the pro-sequester majority. Republican members of the Appropriations Committee also dissented for turf reasons. The sequester intruded on their role in shaping the budget. The result: The sequester was suddenly vulnerable.
Only under these circumstances does the budget accord fashioned by House Budget Committee chairman Paul Ryan and his Senate counterpart, Democrat Patty Murray, become minimally acceptable. It provides $63 billion in sequester relief in 2014 and 2015. It passed the House on December 12, 332 to 94.
Ryan, to his credit, played a weak hand as best he could. The agreement restores $23 billion in defense spending next year and doesn’t include a tax increase. Democrats refused to consider any trims, much less meaningful reforms, in Social Security, Medicare, or Medicaid. And they rejected the bold plan in Ryan’s House budget to raise revenues through opening federal lands and offshore areas to energy development.
The sequester isn’t dead. In the fight to restrain government spending it’s a wounded warrior. It’s supposed to resume its menu of automatic cuts in 2015, but don’t hold your breath. Now that its caps have been breached once, they’re bound to be tossed aside again. And the greatest tool for curbing the growth of government in the lifetime of most Americans will be lost.
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