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Policy: Budgets & Deficits

'Cut, Cap, and Balance' paved way for biggest spending cuts since Ike

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Politics,Conn Carroll,Barack Obama,John Boehner,Debt Ceiling,Budgets and Deficits

“The president is desperate to get rid of the sequester,” Speaker John Boehner, R-Ohio, accurately told his fellow House Republicans on a conference call Aug. 22, “so desperate that he says he’ll shut down the government if Congress follows the law and funds the government at the levels his sequester mandates.”

That second part of Boehner’s statement, however, is actually not true. Obama hates the sequester and desperately wants it repealed, thus raising spending. But he won’t shut down the government over it.

That is what makes the sequester possibly congressional GOPers' greatest achievement in the Obama era. As the Wall Street Journal’s Stephen Moore has noted, federal spending has fallen by $150 billion since it peaked in fiscal 2011, a four percent decline. Spending reductions like that have not been achieved since President Eisenhower's first term.

“The sequester,” Moore wrote, “is squeezing the very programs liberals care most about, including the National Endowment for the Arts, green-energy subsidies, the Environmental Protection Agency and National Public Radio.

"Outside Washington, the sequester is forcing a fiscal retrenchment for such liberal special-interest groups as Planned Parenthood and the National Council of La Raza, which have grown dependent on government largess.”

That’s great news for conservatives. Even better, Obama seems to have resigned himself to sequestration continuing. He knows there is very little he could offer Republicans that would persuade them to get rid of it.

But how did Republicans secure this rare policy victory? Was it by following the House and Senate leadership's’ plans for a “grand bargain” with Obama on entitlement reform and tax hikes?

Remember, Senate Republican moderates were working with Obama deep into July 2011 offering up to $1 trillion in tax hikes in exchange for spending cuts that everyone knew would never happen.

And Boehner himself even struck a deal with Obama that hiked taxes by $800 billion before Obama’s demands for another $400 billion in revenues drove Boehner away.

No. The sequester did not come from Establishment Republicans.

And, as much as Boehner is invested in the talking point, the sequester did not originate from the White House, either.

Bob Woodward, in his book "The Price of Politics," reported that then-White House Office of Management and Budget Director Jack Lew and then-White House Director of Legislative Affairs Rob Nabors pitched the idea of incorporating a sequester in the Democrats' latest debt limit proposal July 27, 2011.

But that was not the first time sequester was raised as a possible solution to the debt limit.

That honor goes to the conservative activists who were pushing their own Cut, Cap, and Balance debt limit proposal, which the House passed seven days earlier on July 20.

The “Cut” and “Cap” planks of the Cut, Cap, and Balance plan both included automatic sequester cuts that exempted Social Security, Medicare, and military personnel spending (the sequestration finally agreed to as part of the Budget Control Act also exempts Social Security, almost all of Medicare, and military personnel spending).

Of course, everyone told conservatives that Cut, Cap, and Balance was a waste of time. K Street Establishment Republicans warned that Obama would never sign a Balanced Budget Amendment and that Republicans would be blamed for a government shutdown.

And the Establishment Republicans were right: Obama would never have signed a Balanced Budget Amendment, and he wouldn’t sign one today, either.

But by fighting for Cut, Cap, and Balance conservatives stopped Republican leadership from agreeing to a massive tax hike, and they set the stage for sequestration.

Republicans everywhere should keep this history in mind when Establishment Republicans attack conservative activists for promoting the Defund Obamacare movement.

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