Say what you will about sequestration, but if Congressional Budget Office data is to be believed, the spending caps adopted in the Budget Control Act of 2011, which was a compromise between President Obama and the House Republican majority, are doing a fine job of controlling federal largesse. If current spending trends hold, sequestration will produce lower federal spending year-over-year for the first time since President Eisenhower was in the Oval Office.
Sequestration is also working well as a federal deficit reduction tool, based on a Congressional Research Service study reported by the Wall Street Journal. According to the Journal, the CRS study found that sequestration's deficit reduction results are second only to the infamous Bush-Gephardt tax hike of 1990, but better than the 1993 Clinton tax hike. Note that sequestration contained no tax increases.
These are especially relevant facts because Senate Majority Leader Harry Reid appears determined to scuttle efforts to reach a genuine compromise with congressional Republicans that would allow the government’s partial shutdown to end and the debt ceiling to be raised, if only for a short time to avoid default and to buy some breathing space for further negotiations.
Reid upended things by demanding that Republicans agree to lift the sequestration spending caps, a move he doubtless knew would be a poison pill. Sure enough, Sen. Rand Paul, R-Ky., said the Reid demand would “increase spending and dramatically will increase the debt. It’s a nonstarter.”
Sen. Bob Corker, R-Tenn., suspected Obama of putting Reid up to the lethal demand, and it certainly brings to mind the theatrics that forced the sequester deal. Obama and House Speaker John Boehner were near a compromise that included $800 billion in new revenues generated by closing certain tax credits and other tax code reforms. Then, out of the blue, Obama demanded an additional $400 billion in revenues from an outright tax hike. “There was an agreement, some additional revenues, until yesterday, when the president demanded $400 billion more, which was going to be nothing more than a tax increase on the American people," Boehner claimed at the time.
Boehner wisely refused Obama’s $400 billion gambit, but Senate Minority Leader Mitch McConnell seems an unlikely candidate to show similar resolve in the face of the Democrats’ newest demand that sequestration be gutted. A deal appears to be in the offing that will effectively nullify sequestration and thus reopen the federal spending spigot.
Doing that appears to be the price Obama and Reid insist Republicans must pay in return for inclusion of some sort of fig-leaf change in Obamacare that McConnell will spin as a significant concession to the GOP. At that point, it will, again, be up to Boehner to decide whether to carry on the fight or to surrender.