Sequester, the worst case scenario that was never supposed to happen, is triggered into existence on Friday, March 1. Automatic spending cuts of $85 billion to be achieved before September 30, 2013 will slowly phase in. Sequester passed into law during the 2010 debt ceiling negotiations. A Congressional Super-committee was supposed to pass modifications to spending and revenue collection totaling $2.5 trillion over ten years. The effort failed.
The evolving partisan argument is absolutely philosophical. Many Republicans, who represent Tea Party groups, believe that less spending can balance federal books when combined with lower tax rates and increased economic activity. Republicans have hung their collective hats on the notion.
During the Reagan administration, this approach was called trickle-down economics. It did not work out as President Reagan predicted. It did not work out during two Bush administrations.
President Obama has signaled that the draconian cuts called for by sequester will be bad for a recovering economy. He says ripple effects could be many times worse. Instead, Obama suggests an approach that closes tax loopholes in exchange for allowing targeted cuts to anticipated federal expenditures and allows some new spending.
The math is very much more complicated than can be presented here. But the bottom line conclusions are obvious. According to government record keepers, the Feds spend more than they take in. If all spending (other than for the military, Social Security, and Medicare) were eliminated, the budget would still not balance. The Organization for Economic Development and Cooperation (OECD) says that the U.S. spends a lower percentage of GDP than almost all comparable nations.
The right wing of the Republican dominated House of Representatives has refused to consider solutions to sequester that adjust revenue upward. House Speaker John Boehner (R-OH) cannot assemble the majority of his members needed to make a compromise possible. They have not even advanced a plan in the current Congress except to say they won’t accept the President’s framework.
Republicans are caught in a trap of their own construction. When they pushed the debt ceiling crisis in 2010 to the brink and over a brink that damaged the country’s bond rating, they agreed to find a way to find equilibrium.
President Obama has made a calculation that allowing sequestration and its ripple effects to actually take place will quickly let the Republicans have their way and allow their supporters to feel the consequences of slashing spending with a meat cleaver rather than trimming it with a scalpel. The President is bringing the question to the people and is betting that voters won’t like the medicine the Republican right wing has prescribed. Today he took his message to the shipyards at Norfolk VA.
The President has said. He will accept compromise. He has put forward his notion of a compromise. It is up to Congress to advance their idea of compromise and make way for a meeting half way between The White House and Capitol Hill.
Politics, after all, is the art of compromise.
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