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Thursday, Feb 28, 2013 11:11 PM UTC

Sequestration: Our dumbest, most avoidable economic crisis yet

When Congress' scramble to find a last-minute fix fails, it will have only itself to blame

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Topics: Next New Deal, Sequestration, sequester, Fiscal cliff, Republican Party, The New Republic, ,

Sequestration: Our dumbest, most avoidable economic crisis yetHouse Speaker John Boehner (Credit: AP/Susan Walsh)
This originally appeared on Next New Deal.

Next New Deal Fingers are pointing in every direction as politicians and pundits assign blame for the automatic spending cuts that are scheduled to kick in tomorrow night. But in truth, it was a real team effort. And something this stupid didn’t just happen overnight; it took a few years of hard work and dedication. These high-stakes games of chicken have become a fixture of American politics during the Obama presidency. In the past, one side or the other has always blinked at the last minute. But the latest iteration looks like it will end in a head-on collision, and while the resulting wreck will be grisly, it might provide the shock to the system we need to steer our political debate back on course.

In this year’s State of the Union address, President Obama declared, “The greatest nation on Earth cannot keep conducting its business by drifting from one manufactured crisis to the next.” The key word there is “manufactured.” Facing mass unemployment, widening inequality, rising health care costs, the threat of climate change, and instability in the Middle East, just to name a few concerns, one would think our lawmakers had more than enough legitimate problems to worry about. But congressional Republicans have proven themselves to be entrepreneurial problem-makers since the night of Obama’s first inauguration, when they gathered to plot his downfall.

From the beginning, the Republican strategy has been one of total opposition, but that backfired once they regained control of the House of Representatives and were actually expected to govern. As a result, writes E.J. Dionne, “The country has been put through a series of destructive showdowns over budget issues we once resolved through the normal give-and-take of negotiations.” The situation reached a boiling point in summer 2011, when Republicans threatened to let the federal government hit the debt ceiling. (No, not that time. The time before that.) Although there’s been a lot of back and forth about whether the White House deserves some or all of the blame for creating the sequester in the first place, it’s worth remembering that the debt ceiling debacle basically forced Obama’s hand. The result was the Budget Control Act, which established a bipartisan and famously useless “Super Committee” to hammer out a long-term deficit reduction plan. The Sword of Damocles hanging over the committee’s heads was sequestration, a mixture of automatic budget cuts designed to be so unpalatable to both parties that they would be forced to find an alternative solution – until they didn’t. Whoops.

Aiding and abetting Republicans throughout this misadventure were the deficit hawks, who grew tired of hearing about the economic crisis almost as soon as it began. They wanted to get back to more serious topics of discussion, like why the Obama administration was suddenly spending so much money. (Could it be… the economic crisis?) Twelve million people unemployed? Meh. One in five children living below the poverty line? Boring. Debt-to-GDP ratio approaching 90 percent? Sweet Rogoff, it’s time to declare a state of emergency! This relentless elite-level concern trolling drove the political debate to the far right while supposedly giving voice to the moderate middle, enabling the GOP’s worst policy instincts.

Now that things are once again down to the wire, Congress is scrambling to find a last-minute fix, but this time it looks like they’ll come up short. A Republican proposal that would have given President Obama more discretion over how to implement the cuts failed after Obama rightly dismissed it as an attempt to keep all the cuts in place while shifting all the blame onto him. A Democratic proposal to replace the sequester with a more balanced package of cuts and revenue was dead on arrival. And no one seems willing or able to simply cancel the cuts and call the whole thing off. As Adam West once said, some days you just can’t get rid of a bomb.

The consequences of sequestration will almost certainly be dire. In a survey of top economists conducted by The New Republic, most predicted that it would slow our already anemic economic growth, while even the most positive assessment cast it as some sort of punishment that America has had coming for a long time due to our failure to don the hair shirt of austerity along with our European allies. The indiscriminate cuts will take a heavy toll on the poor, women and children in general, domestic violence victims in particular, people who eat food… you get the picture. And the fact that this pain is being inflicted by fiat only makes the sting worse.

On the other hand, while sequestration was entirely unnecessary and unwise, something like this was bound to happen once Republicans chose to throw caution and responsibility to the wind. You can win a game of Russian Roulette once, but you’re not likely to have a long reign as champion. Likewise, if you keep inventing fake crises to help you get your way, one of them is eventually going to become real. It’s tempting to hope that this is what it looks like when Congress hits bottom, although it seems to break through to previously unexplored depths each time. But if this is what it takes to wake more Americans up to how distorted our policy debate has become so that we can start rethinking our national priorities, the pain may just barely be worth it after all.

Tim Price is the Deputy Editor of Next New Deal. More Tim Price.

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