In four years, the sequester is the only good idea President Obama has shared with the nation. So of course Obama has spent a great deal of time denying his paternity of it.
As Bob Woodward points out on page 326 of The Price of Politics, the sequester was the brainchild of the Obama White House in the days leading up to the final debt limit deal in August 2011. And despite “tough love” from the Chicago boys, Woodward is sticking with the facts.
Obama was proud of the sequester when he thought it was a trick to avoid real spending restraint. The thinking went as follows. The Republicans in 2011 demanded $2.5 trillion in real spending reduction in return for giving the President a $2.5 trillion increase in his debt limit. For months the president whined and stamped his feet, demanding that the $2.5 trillion be made up of equal parts: real tax hikes now and phantom spending restraint someday. He had two reasons to think this stratagem would work. First, it worked in 1982 against Reagan. And second, it worked 8 years later in 1990 against George H.W. Bush. In 1982 and 1990 the tax hikes were real and spending went up rather than down—even from projected levels.
But Boehner and McConnell were old enough to remember this “Lucy and the Football” trick, and insisted on spending cuts alone.
The August deal was roughly a $1 trillion set of cuts in domestic discretionary spending and the establishment of a “super committee” that was charged to come up with the rest of the $2.5 trillion in borrowing authority the president was granted in the law. If the super committee couldn’t find the additional savings, the law guaranteed a sequester would take place in 2013 to make up the difference. The Democrats on the super committee wanted $1.6 trillion in higher taxes plus $400 billion in more “stimulus” spending. This was, not surprisingly, a no-go and the sequester was the backup already in law.
Obama was certain that this sequester — falling equally on Pentagon spending and non-defense spending — would scare Republicans to vote for a tax hike to replace their spending cuts. He had watched a handful of “Republican spokesmen” on CNN fainting at the thought of defense spending increasing too slowly, and unconcerned with the projected annual taxation jumping from $2.4 trillion to $5.0 trillion over the decade.
Almost to a man and woman the GOP knows that the Pentagon, along with all government programs, can afford to grow more slowly than Obama had planned.
So now Obama is reduced to the equivalent of denouncing his own baby as too ugly to present in public.
House and Senate Republicans have made it clear that they are open to alternative ways to save the same amount of money–$1.2 trillion over the decade. But there will be no tax hike and no loosening of the spending spigot.