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Reminder: The sequester itself is a compromise

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Politics,Beltway Confidential,Philip Klein

In the past several weeks, President Obama and his Democratic allies have been attempting to portray Republicans as intransigent for refusing to compromise on the automatic spending cuts scheduled to kick in on March 1. But it’s important to remember that the composition of the sequester is itself a compromise.

Remember, back in the summer of 2011, Republicans and Democrats were at an impasse over raising the debt ceiling. Obama wanted to raise it by around $2.4 trillion so that he wouldn’t have to deal with the issue again until after the 2012 election, but Republicans were insisting that each dollar increase in the debt limit be accompanied by at least a dollar of spending cuts, which Obama didn’t want to agree to without tax hikes. As the Treasury Department’s stated deadline for raising the debt limit approached, Bob Woodward reported in his book the Price of Politics, the White House came up with the idea of the sequester. Essentially, the idea was to buy an extra few months for a “super committee” of Republicans and Democrats from both chambers to come up with at least $1.2 trillion more deficit reduction, and they’d theoretically be motivated to do so to avoid mutually painful consequences if they did not. The White House brought the sequester idea to House Minority Leader Nancy Pelosi, Senate Majority Leader Harry Reid and Speaker John Boehner. Then Vice President Joe Biden and Senate Minority Leader Mitch McConnell worked out the details further.

As Woodward described, it, Biden insisted in negotiations that any debt limit extension needed to last 18 months, while McConnell wanted to make sure it didn’t involve tax increases:

McConnell had a bottom line also. Of course, it was about taxes. There could be no automatic tax increase in the trigger or sequester. If a joint Senate-House committee could not reach agreement on $1.2 trillion, the trigger could go off but the money would not, under any circumstance, come from a tax increase. It would have to come from spending cuts.

Biden and McConnell, both suffering from severe cases of deal maker’s fatigue, finally agreed: a full 18-month debt limit extension and no automatic tax increase in the trigger.

The agreement was that the triggered cuts would be split between defense (which Republicans opposed) and non-defense spending (which Democrats opposed cutting). The White House, at the assistance of then OMB director Jack Lew (now Obama’s Treasury Secretary choice), insisted that cuts to Medicaid were not part of the sequester.

Which brings us to now, with the cuts scheduled to go into effect in weeks. As our editorial explains, the Democratic offer to temporarily avert the sequester was so fundamentally unserious. Half of the proposed deal would be tax increases and another quarter of the deal would be defense cuts.  So, if Republicans were to agree to this deal, they’d go from a 50-50 split with Democrats to a 75-25 split in Democrats’ favor. Put another way, for every dollar in defense cuts that would be avoided under the deal, Republicans would have to give up a dollar in non-defense spending cuts and agree to two dollars of tax increases. And in 2011, Republicans already decided that cutting defense spending was less bad than raising taxes. When you hear that Republicans are unwilling to cut a deal on the sequester, it’s important to keep in mind that the composition of the sequester itself was already the product of delicate negotiations and Democrats are offering a worse deal.

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Philip Klein

Commentary Editor
The Washington Examiner