The Corner

An Awful Budget Deal

The worst thing about the budget deal — and there are many lamentable things about it — is that it effectively ends sequestration, converting it from a real spending cap into a set of theoretical spending reductions to be implemented at some undefined point in the future. Which is to say, sequestration is now only another federal accounting fiction, an imaginary account that can be indefinitely shortchanged. 

Democrats hated sequestration. Republicans hated sequestration. 


Sequestration worked.

Sequestration is the reason why in recent years we’ve reduced federal spending substantially in GDP terms, from about 25 percent to about 20 percent. It is the main reason that we have reduced the federal deficit in GDP terms. Democrat-supporting welfare entrepreneurs hated it, and Republican-supporting military contractors hated it. Ordinary Americans did not have much in the way of strong views on the matter, which often is the case when a policy actually does what it is supposed to. Effective government rarely is dramatic government. 

The deal puts us on track to dramatically reverse recent real gains on federal spending. If the deal passes as is, which seems likely, and if Paul Ryan does become speaker, his first order of business is going to have to be whipping Republicans into patching up this self-inflicted wound. 

On entitlements, the deal is a very significant step in the wrong direction: Rather than obliging middle-class Americans to pay for the large welfare state they demand, it puts off increases in Medicare premiums and forestalls cuts in Social Security disability payments, necessitated by the fact that the disability trust fund is headed into insolvency. If the entitlements aren’t dealt with piecemeal, then they eventually will have to be dealt with in a much more dramatic and holistic way that isn’t going to make anybody very happy. 

No sensible person expects all that much from congressional Republicans, but this is still less than one would expect.

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