International Monetary Fund chief Christine Lagarde regards recent U.S. spending cuts as “inappropriate,” and Treasury Secretary Jack Lew — the original author of the sequester — took her comments to heart.
“[I]f you look at the amount of deficit reduction we’re doing, we’re just criticized by the IMF for doing too much too soon, that we should do more later and less now,” Lew said on Fox News Sunday.
“In the international community — I just came back from meeting with finance ministers around the world — there’s I think a consensus in the world community that we need to focus on growth, that you cannot just cut your way to growth,” he said.
Lagarde knocked sequestration earlier this month. “The budgetary procedure that is in place in the United States, which leads to a budgetary adjustment, seems to us absolutely inappropriate,” she said at a conference in France, “because it blindly affects certain expenditures that are essential to support medium and long term growth.”If only Lagarde had participated in White House bull sessions about the fiscal debate in 2011, when — according to the Washington Post’s Bob Woodward — Lew came up with the idea of sequestration as a tactic to force Republicans to cave on their demands for spending cuts. “My extensive reporting for my book ‘The Price of Politics’ shows that the automatic spending cuts were initiated by the White House and were the brainchild of Lew and White House congressional relations chief Rob Nabors — probably the foremost experts on budget issues in the senior ranks of the federal government,” Woodward wrote. “Obama personally approved of the plan for Lew and Nabors to propose the sequester to Senate Majority Leader Harry Reid, D-Nev.,” he added. Lew thought that if half the spending cuts came from the Defense Department, Republicans would fold. “That’s good,” Reid agreed, per Woodward. “The president has made clear, he’s told Congress he will not sign a bill, if it fixes defense at the expense of domestic spending. I think we’ve seen in the House, the Republicans have been writing bills that do exactly that,” Lew also told Fox News’ Chris Wallace. That complaint rings a little hollow, though, given that President Obama also threatened to veto a bill that would give him broad flexibility in deciding how to implement the cuts required by sequestration. “There’s no smart way to do that,” Obama said in February.