TRB FEBRUARY 25, 2013
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On March 1 (i.e., this Friday) $85 billion will be sliced, more or less indiscriminately, from the discretionary portion of the federal budget. Everybody agrees this is a bad idea, which it is. But whose bad idea is it? Bob Woodward of the Washington Post and Jackie Calmes of the New York Times both say it came from the Obama White House—specifically, from Jack Lew, President Obama’s nominee for Treasury secretary, who at the time was Obama’s chief of staff. That’s true in roughly the same sense that it was Charles Lindbergh’s bad idea eight decades ago to fork over the equivalent in today’s dollars of $840,000 to a German-born carpenter named Bruno Hauptmann. Faulting Obama for inventing the sequester is like faulting Lindbergh for inflating the local price paid for carpentry work in Hopewell, N.J.
The sequester was a ransom payment. Calmes mentions that the sequester “won Republicans’ support for increasing the government’s debt limit in 2011, and averted the nation’s first default,” but she doesn’t dwell on this point. Woodward mentions it not at all.
We can argue about whether it was wise for the Obama White House to pay ransom to persuade Tea-Party-inspired Republicans to permit a routine debt-ceiling increase on which the world economy depended. In his book The Escape Artists: How Obama’s Team Fumbled the Recovery, my New Republic colleague Noam Scheiber makes a persuasive case that the White House was foolish ever to signal, as it did in mid-April 2011, that it would permit deficit reduction to become part of a debt-limit deal. Then, as now, Obama was willing to cut entitlement programs like Medicare, provided these were balanced out with tax increases. Then, as now, House Republicans refused any deal that included a tax increase. And then, as now, House Speaker John Boehner was not really in control of his caucus as time was running out. So the White House essentially folded, agreeing to $900 billion in spending cuts over ten years; empowering a congressional “supercommittee” to find an additional $1.2 trillion in deficit reduction; and stipulating that, should the supercommittee not achieve its goal (as of course it did not), the cuts would be made in automatic and indiscriminate fashion, half from the defense budget and half from the domestic discretionary budget.
Lindbergh drove a harder bargain than Obama did. Hauptmann demanded a current-dollar equivalent of $1.2 million, but he got only $840,000. The House Republicans got $2 trillion in spending cuts, which is what House majority leader Eric Cantor had repeatedly said he wanted, and they avoided the tax increase they didn’t want. (The “fiscal cliff” deal in late 2012 did include a tax increase on incomes above $450,000, but that was a separate confrontation, and was actually the cancellation of a long-planned, previously-legislated tax increase on all incomes.) Except for having to accept defense cuts in lieu of entitlement cuts, the Republicans got all the ransom they demanded.
On the other hand, Lindbergh’s partial payment to Hauptmann failed, tragically, to save his young son’s life. Obama’s full payment to the Republicans did avert a default on U.S. Treasuries and the onset of a global depression.
On yet another hand, the unappeasable Hauptmann eventually was captured, tried, and executed for his crime (although there’s been some debate over the years about whether they caught the right guy). The House Republicans are still at large, which is why the economy is still in peril.
Coda. Another difference—one not relevant to the point I’m making here, but nevertheless worth clarifying—is that Lindbergh later evolved into a dangerous Nazi sympathizer and would have made a catastrophically bad president, as Philip Roth and others have pointed out. President Obama has his faults, but overall, I think, is a good president.
13 comments
Alas, even with the sequester the government will have more money this year than last year. This is the scam in all this. It isn't LESS money than last year. It's slowing the growth of the money that we would have spent this year. And why on earth does the gov need more money this year? GDP is sucking. Wars are winding down. The general public isn't seeing an annual raise. And yet, gov employees are getting raises across the board. Why? ///Of course, the gov will order layoffs that will hurt the public the most. TSA was fully funded last year. Why can't we fund them at the same level this year? Get this: The vendicitive government, in spite of having just as much money this year for TSA will cut them back so that we all wait in airports. Same with teachers, cops and firemen. But will they take a hit in any of their gov jobs? Not a freaking chance. They might get furloughed, but that is like a paid vacation. All the money comes back as soon as the furlough is lifted. Sweet gig, eh?
- seattleeng
February 25, 2013 at 3:54am
Same old lazy ideological hooey bashing on teachers and other public servants - all so the top one percent don't have to pay what they owe a country that made it possible for them to wallow in their brand new shiny Mercedes Benz. Yes, if we just stop giving vaccines to poor kids, inspecting beef, paying for basic health care for Vets, researching how to avoid plagues or how to mitigate the expense and impact of Alzhiemers on an aging population, if we simply fire enough teachers, stop retraining people, go back to closing our eyes and putting our hands over our ears at the idiocy of our pre ACA health care system, etc etc etc - then all of our dreams will come true - Ayn Rand will come back to life and Utopia will reign. It will all trickle down, you see. Good God grow up, that this right wing economic garbage is still being shoveled just continues to show how incredibly brain dead the right is. How about we try listening to the American people, shall we? Obama just got done winning by 5 million votes on the explicit platform of the richest of the rich going back to Clinton level rates - oh the the tryanny. Deal. with. it. Repeal the Bush tax giveaway to the rich, acknowledge the fact that 3/4 of Obama's bill are cuts in spending. TN - I used to think that Jon Chait was the world champion headline writer, you've definitely overtaken him.
- WandreyCer
February 25, 2013 at 6:39am
But by all means, the next time the latest Wall Street Treasury Secretary walks in to the Oval Office and demands a check for a trillion to support the bad business practices and thievery of the banks - or else the automatic teller machines won't work in the morning - write that thing with no comment. Fuck the teachers.
- WandreyCer
February 25, 2013 at 6:44am
Talk about a sweet gig.
- WandreyCer
February 25, 2013 at 6:45am
While there is never any hope of Seattle's posts seeming to be well considered, this one could have at least seemed less ridiculous had he evinced even glancing familiarity with the notion that government spending right now is meant, in part, to replaced depressed demand in the private sector. It's amazing that he still hasn't heard of that guy Keynes.Or if he disagrees with Keynes, as do so many of those who have generally rejected Enlightenment values when it comes to assessing claims about the economy, the climate or biology, he could have at least acknowledged that there is a well-known answer to his questions. It's hard to take his comments seriously when they appear to be designed primarily to convince us that he hasn't read anything substantial about economics, ever.
- Fishpeddler
February 25, 2013 at 10:57am
Seattle gasoline prices at the pump climbed from $3.40 to $3.80-plus in less than six weeks this year. How can anyone in Seattle commute on constant dollars? Awaiting 'SEATTLEENG" magical energy answer.
- lespin
February 25, 2013 at 11:35am
And yet everyone in the prvate sector is probably getting by for the last 5 years without a raise, are they not Lespin? And everyone in the public sector has had large raises over the last 5 years. See the difference Lespin?///Fish, Keynes advocated stimulus in the form of public works. Massive spending projects that put people to work AND built up infrastructure. Transfer payments were NOT at the center of Keynes thoughts.///So many problems just go away if you fix the economy: Make it profitable for businesses to work, and they will hire. Unemployment will drop. Wages will rise. it's such a shame that the middle class had so much more disposable income and opportunity under Bush. BUSH! Think about that! Our current economy cannot offer the middle class anything remotely better than what they had under BUSH! The suffering you all will endure, just so you don't have to even hint that maybe obama has been pulling the wrong levers....And please, spare me the speech that Bush's policies got us here. Nobody here has made even a flimsy case of what Bush did that got us here.
- seattleeng
February 25, 2013 at 11:46am
I don't know where seattleeng gets the idea that federal employees "are getting raises across the board" or that "everyone in the public sector has had large raises over the last 5 years." I have a friend in the Forestry Service who told me they're in the third year of a pay freeze--with not even a cost of living adjustment, so they're making less in real terms over that period. I did some research, and this seems to be the case with all federal employees. http://www.nffe.org/ht/display/ReleaseDetails/i/63235 Unless there were some very substantial federal employee pay increases four and five years ago to offset these real losses, seattleeng seems plainly wrong on the facts here.
- dsimon
February 26, 2013 at 12:19am
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Linbergh did not understand that he and the Nazis had different world views (I'll leave it to others as to whether Linbergh was anti-semitic), as Obama doesn't seem to understand that he and the Republicans have different world views. It's impossible to make a deal with someone whose world views are different from yours. In his new book, former Representative Tom Allen repeats this point again and again and again and again (as he should, since it has yet to sink in with Obama and the Democrats). TNR has a very flattering profile of Representative Chris Van Hollen, crowning him the next Democratic Speaker. Yet, not once does the profile indicate how Van Hollen would change the leadership's approach to the Republicans. Indeed, the profile indicates that Van Hollen gained the confidence of Biden by detailing a list of items in the budget that could be woven into a grand bargain with the Republicans to avoid the fiscal cliff. Good luck with that! What's needed is a conference call with Noah and Allen, on the one had, and Obama and Van Hollen, on the other, to provide the latter with some history lessons about Linbergh and the Nazis, and Democrats and Republicans.
- rayward
February 25, 2013 at 7:22am
After grumping for more years than anyone remembers against the legendary "waste, fraud and abuse," Republicans have the ultimate occasion for singling out a few examples – and instead insist the current president do it all. Find the excess spending culprits already known to Republicans; harshly, summarily cashier the people and abort the programs, the projects unilaterally; do not pause until Republicans also acknowledge publicly their relinquishing all cutback responsibility implies foregoing all future objections to choices of the people and programs cut. Yeah, right. It's all a failure of White House leadership, some say.
- lespin
February 25, 2013 at 11:07am
Seattle doesn't believe that Federal government spending actually pays for anything. He thinks that it is all just play money, all wasted. Given that the population grows at 1% and we have inflation of 1.5%, the Federal budget has to grow 2.5% to remain the same in real terms. But if you don't think the government really does anything, then there is no such thing as "real terms." Then we have a demographic bulge of baby-boom retirements, which means that social security and Medicare have to grow in real terms unless benefits are going to be cut. Then we have safety net payments that are meant to offset the harshest effects of continuing unemployment. As for the discretionary budget, everything but defense and security have shrunk since 2000, by about 5% relative to GDP, while defense and security have nearly doubled. So, what, out of the discretionary budget, would seattle like to cut? "Waste, fraud and abuse," no doubt that, as pointed out above, the Republicans are unable concretely to identify. The whole thing is a scam. The Republicans have intentionally created huge deficits in the operating budget with reckless tax cuts and unfunded defense increases and then have been trying to use that as a basis for gutting social security and Medicare, programs that they have always detested on ideological/libertarian grounds. Their intense frustration now is that their fake claims about deficits are going to result in cutting programs that everyone wants, and they, the Republicans, are going to get the blame. Whine, whine, whine. About time that the public got a real taste of what Republican/libertarian economic nuttery really means. They made their bed with their hostage-taking. Now they are going to squirm in it.
- roidubouloi
February 25, 2013 at 12:14pm
roid said: "The Republicans have intentionally created huge deficits in the operating budget with reckless tax cuts and unfunded defense increases and then have been trying to use that as a basis for gutting social security and Medicare, programs that they have always detested on ideological/libertarian grounds." That nails it. There is no hope that anyone can truly understand our current budget issues unless they have grasped this basic fact.
- Fishpeddler
February 25, 2013 at 1:50pm
roid and fishpeddler are exactly right. It's just too bad so many people will have to suffer in order for the public to get the point.
- VAliberal
February 25, 2013 at 4:48pm
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