Remember the Republicans’ debt-ceiling crisis in 2011? It was about a year and a half ago when GOP leaders handed President Obama a ransom note: accept more than $2 trillion in debt reduction or the economy gets it. The parties agreed to more than $1 trillion in cuts, but agreed they needed more time to work on a larger agreement.
So, they crafted a mechanism intended to force both sides to the negotiating table – a sword of Damocles hanging over Washington’s head that would be so severe, Democrats and Republicans would have a strong incentive to strike a deal to avoid the drastic consequences.
The mechanism was automatic sequestration cuts – or “the sequester” – valued at about $1.2 trillion, half of which would come from the Pentagon. (Democrats originally wanted automatic tax hikes to motivate the GOP, but Republicans refused – even hypothetical tax increases were deemed outrageous – and deep Defense cuts were used instead.)
These cuts kick in three weeks from today, and so far, the two sides aren’t close. Democrats want a balanced deal the GOP should find tolerable – spending cuts on one side of the ledger, revenue from closed tax loopholes on the other. Republicans, meanwhile, say they’re prepared to simply let the sequester happen, regardless of the consequences to the economy, the military, or the public.
At least, that’s what they say publicly. Behind the scenes, the GOP strategy is on shaky ground.
One thing is becoming clear: Republicans want to find a way to replace the cuts in the sequester, despite some loud rhetoric to the contrary.
Top House Republican aides privately concede that the politics of allowing the cuts to hit – layoffs, furloughs and a stalled economic recovery – are tough to stomach and they would prefer to make a deal, on their terms of course. […]
A top GOP leadership aide, speaking anonymously to divulge internal thinking, laid out 10 options that the House GOP leadership would be willing to accept, along with savings estimates developed by GOP policy aides, in order to avoid the sequester.
So, the good news is, Republicans are not actively seeking a course that would hurt the country on purpose. The bad news is, they’re still struggling with the whole “compromise” concept.
To date, with just 21 days to go, Republicans leaders have offered nothing – there is no sequester alternative on the table, and in this Congress, no bills to replace the sequester have even been written. There are reportedly 10 different scenarios Republican leaders would be willing to consider, but all 10 are made up entirely of deep spending cuts and would not include so much as a penny in additional revenue.
In other words, Republicans want to replace sequestration with a package that gives them 100% of what they want and 0% of what Democrats want.
This after a national campaign in which Democrats voiced support for a balanced approach, and the American electorate strongly agreed.
It’s nice, I suppose, that there are so many Republican-friendly options to choose from – the menu includes everything from raising the Medicare eligibility age to chained CPI, cutting federal pensions to cutting agricultural subsidies – but so long as GOP officials expect a 100%/0% deal, the likelihood of a breakthrough is remote.
That said, with three weeks to go, I expect some movement away from the intransigent status quo. Put aside the rhetoric and the posturing and we’re left with a picture in which Democrats and Republicans actually have the same goal: to get rid of the sequester. The GOP doesn’t want to admit it, but a bipartisan deal, featuring a combination of spending cuts and revenue from closed tax loopholes and unnecessary deductions could come together with relative ease.
What’s more, if the automatic sequestration cuts happen, and the economy tanks, Republicans probably realize this will be their fault and they’ll likely get the blame. It’s why Josh Green wrote late yesterday that a “Republican crackup over the sequester” almost seems inevitable.
As the process unfolds, I’d like to take a moment to throw in my own suggestion: get rid of the sequester. Don’t try to replace it, don’t struggle to find some satisfying ratio that pleases both sides, don’t delay it for a few months, just cancel it. The deficit is already shrinking, spending has already been cut, and if policymakers want to do even more to improve the nation’s long-term finances, they can work on a deal without some dangerous threat hanging over their heads.
Sequestration was a bad idea. There’s no reason both sides can’t agree to get rid of the darn thing and start fighting over something else.