[Vision2020] Sequestration: Two Views Brooks/Krugman: Surprise: Not Totally Dissimilar

[Art Deco]

  [image: The New York Times] <http://www.nytimes.com/>

 [image: The New York Times] <http://www.nytimes.com/>


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February 21, 2013
The D.C. Dubstep By DAVID
BROOKS<http://topics.nytimes.com/top/opinion/editorialsandoped/oped/columnists/davidbrooks/index.html>

On July 26, 2011, Jack Lew, then the White House budget director, went to
Harry Reid’s office for a budget strategy session. According to Bob
Woodward’s book, “The Price of Politics,” Lew told the Senate majority
leader that they had come up with a trigger idea to force a budget deal.

“What’s the idea?” Reid asked.

“Sequestration,” Lew responded.

Reid folded himself over with his head between his knees, as if he were
going to throw up. Then he came upright and gaped at the ceiling. “A couple
of weeks ago,” he exclaimed, “my staff said to me there is one more
possible” enforcement method: sequestration. Reid said he had told his
staff at the time, “Get the hell out of here. That’s insane. The White
House surely will come up with a plan that will save the day. And you come
to me with sequestration?”

Sequestration may have seemed insane back then. But politicians in both
parties are secretly discovering that they love sequestration now. It
allows them to do the dance moves they enjoy the most.

Democrats get to do the P.C. Shimmy. Traditional presidents go through a
normal set of motions: They identify a problem. They come up with a
proposal to address the problem. They try to convince the country that
their proposal is the best approach.

Under the Permanent Campaign Shimmy, the president identifies a problem.
Then he declines to come up with a proposal to address the problem. Then he
comes up with a vague-but-politically-convenient concept that doesn’t
address the problem (let’s raise taxes on the rich). Then he goes around
the country blasting the opposition for not having as politically popular a
concept. Then he returns to Washington and congratulates himself for being
the only serious and substantive person in town.

Sequestration allows the White House to do this all over again. The
president hasn’t actually come up with a proposal to avert sequestration,
let alone one that is politically plausible.

He does have a vague and politically convenient concept. (Tax increases on
the rich!) He does have a chance to lead the country into a budget showdown
with furloughed workers and general mayhem, for which people will primarily
blame Republicans. And he does have the chance to achieve the same thing he
has achieved so frequently over the past two years, political success and
legislative mediocrity.

Republicans also secretly love the sequester. It allows them to do their
favorite dance move, the Suicide Stage Dive. It was pioneered by Newt
Gingrich in 1995 and has been repeated constantly since.

In this dance, the Republicans mount the stage and roar that they are about
to courageously cut spending. In this anthem they carefully emphasize cuts
to programs the country sympathizes with, such as special education, while
sparing programs that actually created the debt problem, like Medicare.

Then, when they have worked themselves up into a frenzy of self-admiration,
they sprint across the stage and leap into what they imagine is the loving
arms of their adoring fans. When they are 4 feet off the ground, they
realize the voters have left the building in disgust and they land with a
thud on the floor.

Sequestration allows the Republicans to do the Suicide Stage Dive to
perfection. Voters disdain the G.O.P. because they think Republicans are
mindless antigovernment fanatics who can’t distinguish good government
programs from bad ones. Sequestration is a fanatically mindless piece of
legislation that can’t distinguish good government programs from bad ones.
Sequestration carefully spares programs like Medicare and Social Security
that actually contribute to the debt problem. Sequestration will cause
maximum political disgust for a trivial amount of budget savings.

So, of course, the conservative press is filling up with essays with titles
like “Learning to Love Sequestration.” Of course, Republican legislators
are screwing up their courage to embrace it. Of course, after the cuts hit
and the furor rises, they are going to come crawling back with concessions
as they do after every Suicide Stage Dive.

These two dance moves, the P.C. Shimmy and the Suicide Stage Dive, when
combined, are beautifully guaranteed to cause maximum damage to the
country. What’s America’s biggest problem right now? It is that business
people think that government is so dysfunctional that they are afraid to
invest and spur growth. So what are the parties going to do? They are going
to prove that government is so dysfunctional that you’d be crazy to invest
and spur growth.

In a normal country, the politicians would try some new moves. For example,
if they agreed to further means test Medicare they could save a lot of
money. Democrats would be hitting the rich. Republicans would be reforming
entitlements.

But no. Both parties love their current moves. It’s enough to make Harry
Reid put his head between his legs and throw up.


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February 21, 2013
Sequester of Fools By PAUL
KRUGMAN<http://topics.nytimes.com/top/opinion/editorialsandoped/oped/columnists/paulkrugman/index.html>

They’re baaack! Just about two years ago, Erskine Bowles and Alan Simpson,
the co-chairmen of the late unlamented debt commission, warned us to expect
a terrible fiscal crisis within, um, two
years<http://blogs.wsj.com/washwire/2011/03/08/bowles-simpson-fiscal-crisis-could-come-within-2-years/>unless
we adopted their plan. The crisis hasn’t materialized, but they’re
nonetheless back with a new version. And, in case you’re interested, after
last year’s election — in which American voters made it clear that they
want to preserve the social safety net while raising taxes on the rich —
the famous fomenters of fiscal fear have moved to the right, calling for
even less revenue and even more spending cuts.

But you aren’t interested, are you? Almost nobody is. Messrs. Bowles and
Simpson had their moment — the annus horribilis of 2011, when Washington
was in thrall to deficit scolds insisting that, in the face of record-high
long-term unemployment and record-low borrowing costs, we forget about jobs
and concentrate exclusively on a “grand bargain” that would supposedly (not
actually) settle budget disputes for ever after.

That moment has now passed; even Mr. Bowles
concedes<http://blogs.wsj.com/washwire/2011/03/08/bowles-simpson-fiscal-crisis-could-come-within-2-years/>that
the search for a grand bargain is on “life support.” Let’s convene a
death panel! But the legacy of that year of living foolishly lives on, in
the form of the “sequester,” one of the worst policy ideas in our nation’s
history.

Here’s how it happened: Republicans engaged in unprecedented
hostage-taking, threatening to push America into default by refusing to
raise the debt ceiling unless President Obama agreed to a grand bargain on
their terms. Mr. Obama, alas, didn’t stand firm; instead, he tried to buy
time. And, somehow, both sides decided that the way to buy time was to
create a fiscal doomsday machine that would inflict gratuitous damage on
the nation through spending cuts unless a grand bargain was reached. Sure
enough, there is no bargain, and the doomsday machine will go off at the
end of next week.

There’s a silly debate under way about who bears responsibility for the
sequester, which almost everyone now agrees was a really bad idea. The
truth is that Republicans and Democrats alike signed on to this idea. But
that’s water under the bridge. The question we should be asking is who has
a better plan for dealing with the aftermath of that shared mistake.

The right policy would be to forget about the whole thing. America doesn’t
face a deficit crisis, nor will it face such a crisis anytime soon.
Meanwhile, we have a weak economy that is recovering far too slowly from
the recession that began in 2007. And, as Janet Yellen, the vice chairwoman
of the Federal Reserve, recently
emphasized<http://www.federalreserve.gov/newsevents/speech/yellen20130211a.pdf>,
one main reason for the sluggish recovery is that government spending has
been far weaker in this business cycle than in the past. We should be
spending more, not less, until we’re close to full employment; the
sequester is exactly what the doctor didn’t order.

Unfortunately, neither party is
proposing<http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/20/the-sequester-absolutely-everything-you-could-possibly-need-to-know-in-one-faq/>that
we just call the whole thing off. But the proposal from Senate
Democrats at least moves in the right direction, replacing the most
destructive spending cuts — those that fall on the most vulnerable members
of our society — with tax increases on the wealthy, and delaying austerity
in a way that would protect the economy.

House Republicans, on the other hand, want to take everything that’s bad
about the sequester and make it worse: canceling cuts in the defense
budget, which actually does contain a lot of waste and fraud, and replacing
them with severe cuts in aid to America’s neediest. This would hit the
nation with a double whammy, reducing growth while increasing injustice.

As always, many pundits want to portray the deadlock over the sequester as
a situation in which both sides are at fault, and in which both should give
ground. But there’s really no symmetry here. A middle-of-the-road solution
would presumably involve a mix of spending cuts and tax increases; well,
that’s what Democrats are proposing, while Republicans are adamant that it
should be cuts only. And given that the proposed Republican cuts would be
even worse than those set to happen under the sequester, it’s hard to see
why Democrats should negotiate at all, as opposed to just letting the
sequester happen.

So here we go. The good news is that compared with our last two
self-inflicted crises, the sequester is relatively small potatoes. A
failure to raise the debt ceiling would have threatened chaos in world
financial markets; failure to reach a deal on the so-called fiscal cliff
would have led to so much sudden austerity that we might well have plunged
back into recession. The sequester, by contrast, will probably cost “only”
around 700,000 jobs<http://macroadvisers.blogspot.com/2013/02/mas-alternative-scenario-march-1_19.html#%21/2013/02/mas-alternative-scenario-march-1_19.html>.


But the looming mess remains a monument to the power of truly bad ideas —
ideas that the entire Washington establishment was somehow convinced
represented deep wisdom.


-- 
Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com
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