Thursday, September 20, 2012

Hypocrisy and Sequestration

The Hotline's Reid Wilson says:
Every member of Congress who complains about sequestration should be required to admit whether voted for it in the same breath.
I strongly disagree with the implication here, which is that it's hypocritical to have voted "for" sequestration but then be against it.

Remember how we got here. House Republicans (and, I suppose, Senate Republicans too, although they as a group weren't really driving the process) demanded huge spending cuts as a condition for raising the debt limit. Democrats refused. The result was a stalemate, which threatened to produce a government default.

Democrats and Republicans agreed to negotiate for a "grand bargain" deficit reduction package. There's quite a bit of dispute about why that grand bargain was not reached. Democrats believe that Republicans really had no intention of reaching any deal that involved any compromise at all; Republicans believe that Democrats weren't really willing to cut spending in any kind of serious way. Note that the key thing there was that both sides claimed to want a large deficit reduction package but didn't believe the other side was sincere (the Democrats, or at least the White House and many leading Congressional Democrats, claim to want long-term deficit reduction and have advanced plans to achieve that, but didn't want to tie it to the debt limit).
At any rate, the grand bargain talks failed: more stalemate, and a more urgent threat of a real calamity.

The solution that both sides could live with involved some immediate cuts, and a process for continuing the grand bargain negotiations: first through the "supercommittee" process, and then if that didn't work through the normal legislative process but with a sequester programmed in at an agreed-to deadline. The sequester was intended, then, not to be implemented, but to force other action. It was deliberately designed to consist of things that everyone found unacceptable: domestic spending cuts that Democrats didn't want; defense cuts that Republicans didn't want; and an across-the-board process that would produce lots of cuts that no one wanted.

So: the threat of the sequester was intended to force a compromise that both sides claimed to want (and, in the meantime, to avoid the GOP-threatened default) by inventing something worse that no one wanted.

And therefore I don't think there's any hypocrisy at all in a Member having voted "for" the sequester -- that is, for a process to end the debt limit threat and to work for a grand bargain -- without actually supporting the sequester. No one wanted the sequester if it was properly designed; that was the point.

Basically, I don't see any hypocrisy or dishonesty at all in anyone who voted for the Budget Control Act last summer but who currently supports deficit reduction while opposing the sequester. That's an entirely consistent position.

Moreover, given the specific choices available at the time, I'd say that a vote for the Budget Control Act was probably the best choice even for someone who didn't want large-scale deficit reduction at all. If the choice was large deficit cutting then or a procedure to induce large deficit-cutting in eighteen months, then kicking the can down the road was a reasonable choice. And of course it ended the threat of default then, although that too was just kicked down the road. Sometimes, that's the best choice. It doesn't require endorsing the sequester.

No, voting for the Budget Control Act in 2011 while now objecting to the sequester isn't at all inconsistent.

Now, what is inconsistent is to claim, as some Republicans are, that the sequester is some sort of Barack Obama plot to sink the economy. Or to claim that immediate deficit reduction through spending cuts is absolutely necessary to save the economy but that defense spending cuts will sink the economy. Or, in my view at least, insist both that budget must be balanced but also that taxes should be slashed and that cuts to most spending would be calamities.

But there's nothing at all wrong in simply having voted for the sequester and now opposing implementing it. That was the whole idea from the beginning.


  1. voting for the Budget Control Act in 2011 while now objecting to the sequester isn't at all inconsistent.

    But that's only true if you consider that the only alternative to the Budget Control Act was national default, brought about by the refusal of the GOP to raise the debt limit.

    That is: voting for the Budget Control Act doesn't mean that you approved of all the measures contained in the sequester, but it does mean that you preferred the sequester to national default.

    What that means is that a Democrat that voted for the sequester could reasonably say that he/she was between a rock and a hard place. There were two bad options; sequester was the least bad option. And that's not inconsistent with now saying "the sequester is bad."

    But, considering that it was the GOP that threatened national default if it didn't get spending reductions, I think it is extremely disingenuous (if not outright hypocritical) for a GOP member who voted for the sequester, to now complain about the sequester. After all, it was the GOP that restricted the possible options to sequester or national default. If they wanted, they could have included a third option: clean debt ceiling increase. That would have the effect of avoiding national default and the cuts made by the sequester: exactly the state of affairs that they are now are claiming that want to be in effect.

    Again, that doesn't mean that GOP members approved of everything in the sequester. But it does mean that those GOP members that voted for the Budget Control Act viewed the sequester as preferable to a clean debt ceiling increase. In my view, that is definitely inconsistent with complaining about the sequester today.

    1. Yes. +1

      And more simply, having voted for the sequester still means that one would want the sequester to occur in the absence of some compromise by the end of 2012. To complain about the sequester now, if you're a Republican who voted for it, is to change your order of preferences, unless it's absolutely clear that you're working 100% to do everything to achieve a real ideological compromise with the other side.

    2. Andrew (and you too, Jonathan) neglect a third outcome: no debt ceiling increase deal is reached and the government is forced to shave about a third off spending WITHOUT default.

      Let's keep in mind that failing to increase the debt ceiling does not mean the government ceases to operate. It only means that it can no longer spend more than it takes in. In FY2012, total federal revenue was $2.469 trillion. It's only because federal spending was $3.796 trillion that resulted in the ceiling needing to be increase. Had we spent only $2.469 trillion, the debt ceiling debate of last summer would have been moot.

      Let's also keep in mind that our debt payments equaled about $224.8 billion in FY2012. Since $2.469 trillion > $224.8 billion, we could clearly cover those debt payments and still have some $2.244 trillion remaining left to prioritize. Yes, it would be difficult and disruptive and yes some of the things we fund today would not have been funded, but I think you can see where I am going: there was zero need to default.

      In fact, with the remaining revenue we could have reduced all department and spending by about 37%, made those hard cuts and moved on. Or decided to keep some departments at closer to 100% of current levels and then take a larger share off others - again, there would be pain and there would be disruptions, but there was and is no need to continue the red herring that we could not pay our legally obligated debts out of the a pool of revenue that is ten times the size of the payment needed.

      What you have done is to conflate legally obligated debt that must be paid with every bit of spending that our leaders sign us up for. If they were the same thing, then anytime we reduce spending at all, we've defaulted under this world (and lexicographical) view.

      I understand there are legal and constitutional questions about the process under which certain spending is set as priority by the executive without the express authority to do so by the legislature. But given that the mandate for legal debt payment is set by the constitution as well as prior rulings that any benefit or law set by Congress can be undone by Congress, these could be worked through.

      Worst case, we end up at the High Court for a ruling. But that would have been down the road from the time we reached the debt ceiling. The day after which, while the National Parks may not open and the agriculture extension offices across the nation might be close, there would have been enough cash to make 100% of the debt payments. Plus make 100% of SS payment, plus pay 100% of Medicare claims, plus keep 100% of DoD spending rolling on (if those are the priority choices you want to make).

      I know pointing this out does not advance the conversation about whether all members who supported the debt increase should support the sequester. But because that was being considered in such a binary manner, I think it is important to recognize that there are other variables because there were other possible outcomes. And precisely the notion that default was not an automatic outcome of not increasing the ceiling was mentioned by many - in and out of Congress - at the time and therefore must be considered in your matrix of if A, then B.

    3. +1 on Andrew's point.

      @Anon: the problem is that that option was almost universally detested, except among the tea partiers, and in the interests of keeping this conversation civil, I won't go into that. So, while it was an option, it was pareto-inferior to the other options, so it could be safely ignored.

      Cutting spending by 1.3 trillion isn't going to make the recession worse. It likely simply kills the economy, and we go all Mad Max-y. Hyperbole? Maybe, but I don't think I'm too far out on a limb here. Whether supply-sider or Keynesian, I think most economists would agree that allowing the debt ceiling to simply kill that much spending while unemployment is already high would be tantamount to economic suicide. Heck, maybe all that is wrong, and it wouldn't have been all that bad, or we have to rip the band-aid off eventually, or whatever. The point is: the vast majority of Ds and Rs BELIEVED that to be true, so the outcome you denote wasn't on the table.

      It's also not clear that cutting spending is the outcome. Congress authorizes the debt. Congress passes spending bills. In fact, Congress had passed the spending bills authorizing more spending than would be possible with existing debt authority AFTER they had passed that debt ceiling. So, a reasonable argument could be made that the debt ceiling is really a fiction: because Congress has passed new laws since then. The debt ceiling is not in the rules of Congress, so it's a law like any other and new laws supercede old ones. In a very real sense, it's both illegal for the Treasury to issue new debt AND for them to not spend the money that's been appropriated (and, below the level of the Secretary, different people are responsible for the different tasks, so what should they do besides follow the law that applies to them?). Congress and the President might not actually want to know the answer to the question, as well (similar to how the question of the constitutionality of the War Powers Act hasn't been tested, because neither Congress nor Prez want to test it). It behooves both Congress and Presidency, both Dems and Reps, to keep with the notion that the debt ceiling is real, and that we have to keep it and spending in line with each other.

    4. Matt, a few comments:

      Most laws passed by Congress are passed subject to the budget rules. These rules ARE set as the rules of Congress at the beginning of each session.

      Authorizing new spending is not the same as actual spending. If it were, we would be in much, much worse shape. Authorizations set a cap, much like the debt limit, and the appropriations then sets the actual dollars out the door value from zero all the way up the authorized limit.

      Appropriations can actually exceed the authorized limit if the budget rules are waived as part of the consideration of the bill. It happens all the time, but it is kept in check by the power of the committee chairmen who like to keep their turfs well protected. The Byrd rule, which you may have heard of, centers around this very idea.

      As for the appropriated levels, it is not illegal as you say for the executive to not spend every dollar. In general, appropriations bills are written so that "such sums not to exceed $X" are allocated and while most departments don't leave much money on the table, it happens and certainly isn't discouraged (except for politically connected earmarks, which often would be written in a more "such sums shall include" sort of way.

      So, the debt ceiling is very real and I don't think there would be much dispute over it, 14th Amendment discussions included. It of course can be changed by an Act of Congress, that's what happens when it is increased, and that reality is part of what would keep there from being any other circumvention.

      As for the effect of going this route, I'll agree it would be sudden and drastic. Whether it is any worse than continuing to kick the can down the road is an open question.

    5. As for the effect of going this route, I'll agree it would be sudden and drastic. Whether it is any worse than continuing to kick the can down the road is an open question.

      Immediately slashing federal spending by one-third would be undoubtedly worse for the economy than "kicking the can down the road" - which is what we're doing now. The outcome you suggest is probably even worse than national default. Which is why no one (outside the hard right wing, which stood to reap the electoral awards from a devastated economy) ever seriously considered it.

    6. I don't agree that reducing spending by 1/3rd it is undoubtedly worse than kicking the can down the road. It may be and likely is today, but at some point we will run out of road and at that point the can will fall off the cliff. And that will be worse.

      I would argue that it is only because so much of the world is also in bad shape that we've had as much road as we do. If savers had some place else to put cash, they would and we would face two options: allow interest rates to rise or continue QE infinity via the Fed buying all T-Notes will made up money. The first becomes untenable as we would see interest on the debt start to crowd out everything else and the second will and must result in inflation .

      A run on either that is commensurate with the level needed to restore balance would have consequences that are comparable or worse to the 1/3rd spending reduction.

      Moreover, my original point wasn't that this outcome is desired, but that its existence disproves the binary nature of the hypocrisy test that Jonathan established.

      Those same Tea Party members who you say are the only ones who favored this route, are the same people who you also say fail his test. There is your logic flaw.

  2. "Democrats and Republicans agreed to negotiate for a "grand bargain" deficit reduction package. There's quite a bit of dispute about why that grand bargain was not reached. Democrats believe that Republicans really had no intention of reaching any deal that involved any compromise at all; Republicans believe that Democrats weren't really willing to cut spending in any kind of serious way."

    This doesn't ring true to me. Democrats correctly believed Republicans wouldn't agree to any deal that involved even, say, 10:1 spending cuts to tax increases. Taxes were the sticking point not spending cuts. The Democrats including Obama made it quite clear they were prepared to accept enormous spending cuts if Republicans would agree to even minor tax increases, but the GOP wouldn't. Hence the debt deal, the inevitably failed deficit commission, and the looming threat of sequestration.

    1. Ron, on the face of it, your summary is correct.

      But consider for a moment that you were part of these negotiations and that in every past attempt to reach a grand bargain that included a mix of new taxes and spending slow downs, what has happened is that the agreed to spending slow downs were removed at some point down the road. After the taxes were increased. And worse yet, it's not just the other team that is doing it: your own party simply can't say no to always more spending.

      What do you do?

      Sure, Democrats made it quite clear that they were willing to accept spending cuts - cough, reductions in planned increases - but history makes it even more clear that it won't stick.

      We are systemically unable to keep them. Which is why we need gimmicks like the BRAC to close military bases or the Super Committee. Elected politicians can't say no even when they run on and are elected on the platform of being able to say it.

    2. Ah yes, the old "Democrats can't possibly cut spending because they may someday undo those cuts" canard.

      The fact is, if Republicans were willing to accept even a wee bit of new revenue, we would have a Grand Bargain enacted into law already.

      I don't know what effect a 2011 Grand Bargain would have had on the economy. Perhaps the combination of tax hikes and spending cuts would have sent us into a double-dip recession. If so, maybe Romney would be headed for victory right now.

      But you simply cannot say that politicians are "systemically unable to keep" promises when the only thing preventing those promises from being kept is the intransigence of one party.

    3. Calling it a canard doesn't make it one. And, more to the point, I don't think you understand me. Reaching a grand bargain is the easy part. Living up to it, is harder.

      Yes, if Republicans had just agreed to wee higher taxes, we'd have a deal. But the next year, or more likely that very same year, the spending reductions would unravel.

      To be clear, I know how hard it is to say no and if we didn't live in a resource constrained world, many of the funding requests would be worth doing. Yet, it's near impossible given our current system to say no and have it stick. That's why unalterable mechanisms like BRAC and the Super Committee are needed at all.

    4. Reaching a grand bargain is the easy part. Living up to it, is harder.

      That's ludicrous. Drafting and enacting a law that dictates the reduction of spending and raising of taxes is obviously the hard part. "Living up to it" just means letting the existing legislation take effect. And that requires ... doing nothing. Which is pretty darn easy, especially if the 60-vote requirement is here to stay.

      I understand the idea that nothing is certain - Congress can always reverse itself. But that also applies to BRAC (nothing preventing Congress from re-opening those bases) and the Super Committee (which, had it actually produced a consensus, would have required Congressional approval anyway!).

      There's nothing truly "unalterable" in our system. Because of that fact, the idea that Democrats shouldn't be given credit for being willing to legislate massive spending cuts is misleading and unfounded; i.e., a canard.

    5. I understand how it is supposed to work, but I also know and watched first hand for ten years how it does work.

      Living up to is isn't doing nothing. Too much must pass every year for that to be true.

      Here is the best example for you to look into if you are not familiar with it: google "doc fix and Balanced Budget Act of 1997".

      I'll assert the entire weight of my position on what happened there being the norm and being what would happen to any grand bargain.

    6. The story of the doc fix is actually a good one for this. IIRC (and I don't have time to look it up), what wound up happening is that there were in fact savings produced. The reason the doc fix is constantly having to be renewed is a stupid budget trick, but again IIRC it's not really a sign that the original intent was violated.

      I believe that most of the spending cuts in the Bush and Clinton (1993) deficit reduction deals worked out fine, too.

      Another example: the age increase in SS (1983) has never been repealed or even challenged.

      I'm in the middle on the general point. Yes, spending cuts sometimes don't get implemented over time. But no, it's not inevitable that they do not get implemented.

      (Also: I'm not sure of the whole history of it, but I'm pretty sure that the doc fix has been offset most (many?) of the times that it's been done, so even if the savings doesn't come from the same place there are still savings. But I could be wrong about that, and don't have the energy to look it up just now).

    7. Drafting and enacting a law that dictates the reduction of spending and raising of taxes is obviously the hard part. "Living up to it" just means letting the existing legislation take effect.


      Ridiculous. The lefty US Senate hasn't passed a budget in 3 years, in clear violation of the law.

      Laws mean nothing in Washington. They either get ignored, or changed at will.

      When the Congress decided to blow through the existing mild spending caps after Gingrich got run out of Washington in the late 90's, they just folded those existing caps into the new law, caps heretothen part of existing law... and POOF... no more caps and you get a nice spending increase.

      And when Pelosi was crowing in 2007 that her new Congress passed "Pay-Go", we all know that it was a joke, as spending rose massively.

      So no, the "law" means absolutely nothing, and passing "law" is the easiest part of all of it. It is the "living up to it" that is difficult. History tells us that. That's how you get 100% debt to GDP so quickly.

    8. FYI - the Anonymous who wrote the above (September 21, 2012 2:42 PM) is not the same person who wrote the rest of them under the username (i.e., me). Not that I disagree with much of the above, but given the back and forth I thought I would point that out.

  3. Yes, it's hypocritical to have voted for the sequester and to now oppose it.

    But hey, I'd deeply love for some of the opposers to vote that way... and preferably to do it over the next few weeks. ;-)

  4. I completely disagree with Jonathan's reasoning-particularly for Republicans. The Dem's are willing to kill sequestration if the GOP agrees to tax increases. The GOP refuses that. If sequestration was designed to make it so that EVERYONE feared its implementation, then it didn't work because the GOP won't budge even in the face of its implementation. So they whine about it and blame Obama for not compromising-even though he agrees to massive spending cuts IF it includes tax increase. This position is hypocritical.

    1. Excuse me but we just raised taxes. Did you know that because with the lack of information out there I was thinking you might have missed it.

  5. This sequester. A grand total of $84 billion. Is the equivalent of what you or what I might find in the cushions. We will still spend $9 trillion over the next ten years. The sequester itself doesn't cut current spending it is a cut of future increases. Once again we aren't even talking about real cuts. It once again a idea of not spending fictional money. Its like talking about what you would or wouldn't buy if you won the lottery.


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