The sequester, no matter how imperfect a policy, is arguably the only victory for fiscal conservatives in a very long time. Their victory is also president Obama’s biggest defeat (outside of the self-inflicted disastrous Obamacare rollout). It is also another opportunity to remind the American people that the alarmist predictions that we were all subjected to about the devastating impact sequestration would have on our economy didn’t materialize. Yet, in a new move, Republicans are once again considering caving to Democrats and getting rid of the spending cuts. This morning’s Wall Street Journal has the following.
Still, officials close to the talks say that Sen. Patty Murray (D., Wash.) and Rep. Paul Ryan (R., Wis.), chief negotiators for their parties, are closing in on a deal that, while smaller in scope than past budget deals, would mark a rare moment of bipartisanship in a Congress that has been lurching from one fiscal crisis to the next. . . .Officials say they expect the compromise to allow spending of roughly $1 trillion in each of the next two years, a figure between the $967 billion that House Republicans sought for the fiscal year that began Oct. 1 and the $1.058 trillion sought by Senate Democrats. . . .
At issue are efforts to craft a compromise that would ease across-the-board spending cuts due to take effect in January, known as the sequester, and replace them with a mix of increased fees and cuts in mandatory spending programs.
Note that we are not talking about serious entitlement reform here:
Officials familiar with the talks say negotiators are stitching together a package of offsets to the planned sequester cuts that would include none of the major cuts in Medicare or other entitlement programs that Mr. Ryan has wanted. . . . Instead, it would include more targeted and arcane measures, such as increased fees for airport-security and federal guarantees of private pensions.
“None of the major cuts in Medicare or other entitlement programs that Mr. Ryan has wanted”? More money to fund TSA? Seriously? And that’s only the beginning:
Democrats on Thursday stepped up their demands in advance of the closing days of negotiations between Ms. Murray and Mr. Ryan. House Democratic Leader Nancy Pelosi (D., Calif.) brought a fresh demand to the table by saying she wouldn’t support any budget deal unless in included or was accompanied by an agreement to renew expanded unemployment benefits that expire before the end of the year—which would be a major threat to any deal.
So let’s sum this up: a massive and unnecessary surrender on the sequester, some tax hikes, and more unemployment benefits. It seems to me that the Republicans are learning their moves from the French army. Meanwhile, some in the GOP disagree with the tactic and think that sequester cuts should stay in place. Politico reports:
Three well-respected conservative House Republicans are urging their leadership to pass a government funding bill at the low sequester level most in the GOP are trying to avoid.
Reps. Mick Mulvaney (S.C.), Jim Jordan (Ohio) and Steve Scalise (La.) are advocating in a letter to Speaker John Boehner and Majority Leader Eric Cantor that they vote for a so-called clean continuing resolution at the sequester level of $967 billion for 2014 spending.
And this is the worst part:
Most Republicans — conservatives and moderates alike — are hoping Ryan and Murray succeed, because they believe sequester level spending is unsustainable.
If they really think that the minor cuts imposed by sequestration are unsustainable how are they going to push for the true entitlement reforms that we need?
I have said it before, but I guess it is worth repeating in the face of an imminent Republican surrender: Mr. Ryan don’t squander the sequester cuts for nothing:
So in theory, sequestration and the BCA caps would be traded for a commitment to reform entitlements. However, in the current political contect, we should expect that this commitment won’t be credible and won’t be enough to address our country’s fiscal problems. As such (I have mentioned it before), it would be a terrible mistake to get rid of these cuts. These are the only cuts they have in the bag; they shouldn’t give them up. They especially shouldn’t give them up if what they are most likely to get in exchange are, at best, a few meaningless entitlement reforms that won’t make much a of a dent in our debt.
Finally, since when does Paul Ryan sound like a Keynesian? Does he really believe that the tiny sequestration cuts are hurting the economy so much that we must “provide relief”? Argue for entitlement reform, Mr. Ryan, but don’t squander for nothing or next to it the only cuts we’ve won.