Sunday, February 17, 2013

Why the Sequester is likely to occur

I am confident that the Sequester will go into effect.

There are two reasons why.
1) Republicans in Congress believe that the national debt is the foremost political challenge of our time. They echo the sentiments of former C-JCS Mike Mullen, who argued that American's debt represents the key threat to US national security. As a result of this thinking, albeit reluctantly, most GOP politicians are willing to endure the military cuts that the sequester will reap. In simple terms, Republicans just don't feel that they have any other options available to achieve the kind of debt reduction that they believe is absolutely necessary. From the tea party to the Washington old guard, much of the GOP now regards the President as an intransigent negotiator. A leader who will not entertain serious entitlement reforms (which are crucial for debt reduction) in the absence of serious political pressure.

2.a) Though over-simplified by many observers, the loosely termed Tea Party is still a fundamental driving force behind GOP action in Congress. These conservative voters have successfully shifted the GOP's internal discourse away from social conservatism and towards debt reduction/size of government. As a result, Congressional Republicans understand that a very sizable, very active block of voters expect them to take major action in order to reduce the debt. Even Republicans who would wish to avoid sequestration feel that they cannot back down to the President's demands for a mixed revenue/spending cut short term resolution. At this level, it is once again evident that the relative prospects of a primary challenge vs re-election are powerful motivating forces.

2.b) I have no evidence for this postulation, but I expect that many Republicans believe President Obama will ultimately cede to a deal, once sequestration begins to bite (when the continuing resolution expires at the end of March). Why do these politicians feel this way? I think because of the prospect of what sequestration will do to the US Military. If Obama fails to avert these cuts, he will have to face the American people as the Commander in Chief who allowed his forces to be gutted. The President's advisers probably assume that they can shift the blame onto Republicans, but the GOP will be able to counter this argument by pointing to their January acceptance of new tax increases. As my latest column for The Week notes, Senate Republicans have weakened their negotiating  position because of their actions towards Chuck Hagel. Nonetheless, in allowing severe military cuts in preference to domestic cuts, the political risks for the President (who first proposed the Sequester) and the Democratic Party (which still doubts its national security credibility) are profound.
What does this mean for sequestration? I expect that a deal to halt the sequestration cuts will be reached at the end of March or in early April. Such a deal would likely focus on domestic discretionary spending cuts, alongside a GOP agreement to join a Congressional tax reform commission (this will be necessary to placate Democrats). Depending on the President's interest in serious debt negotiations, the pursuit of a long term deal may also become a part of these negotiations. However, my personal feeling is that a long term, trend stable debt deal is probably at least a couple of years away. Thus far in his new term, the President's tone suggests that he is waiting to see if the Democrats can retake the House of Representatives in the next Mid-terms.

No comments:

Post a Comment