On Sequester, The Worse the Better for Obama

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Power Play 2/22/2013

On Sequester, the worse the better for Obama. And can the GOP turn tables on cuts? Plus Hagel still standing.

“And look, there is no way that you can come up with some easy off-ramp…”

-- Gene Sperling, director of President Obama’s National Economic Council, on “Special Report with Bret Baier” waving off the suggestion of allowing the president to make automatic spending reductions in a targeted fashion.

The effect of the dreaded “sequester” is a budgetary fleabite to the ever-expanding national debt.

Spending will actually increase this year even with the automatic reductions – about $15 billion more than 2012 according to CBO estimates.

Yes, the reductions will bring down deficit spending, but only on the order of about $40 billion this year. But the federal government will still borrow some $845 billion in the current fiscal year.

To make the reductions sound as bad as possible, President Obama has described doomsday scenarios with hundreds of thousands of jobs lost. But to get to those estimates, one has to assume that the reductions to future automatic increases over the next decade will all go into place.

The reductions to future spending, about 3 percent between now and 2023, assume that Washington doesn’t ever get its act together. That there is no budget, no deal on debt, no tax reform. Nada.

Based on the sclerosis of recent years, one might be tempted to assume that Washington might careen from fiscal crisis to crisis for the next decade. But sometime in the next five election cycles, voters will break the partisan deadlock in Washington and allow for some modicum of fiscal planning.

Indeed, the point about the sequestration fight isn’t so much about the current budget battle, but future ones.

Obama has so far successfully outrun Republican efforts to reduce spending. The president talks about $2.5 trillion in “deficit reduction,” but these too are projections and estimates, based in on some very reedy suppositions, famously including getting credit for savings from the Iraq war still being over, and tax increases.

But as for cuts, there have been none. Reductions to future increases, yes. But no cuts.

So, despite increased federal spending, the president is again today talking about the crippling reductions he says will result from the government spending only $15 billion more this year than last year.

He’s right, up to a point. The way the sequester was designed (the brainchild of Team Obama) imposes the cuts indiscriminately so as to cause maximal disruption. It’s a device designed to fulfill every Democratic warning about the dangers of reduced spending.

Obama is telling Americans that this is how Republicans want to govern, indiscriminately slashing through the government without regard for the consequences. He proposed the sequestration but now is using it to show a funhouse mirror distortion of Republican plans.

The proposal currently bouncing around the Red Team is to actually empower Obama and his agency heads to make the cuts with discernment. Rather than whacking all programs good and bad, efficient and inefficient, some Republicans are calling for a bill that would tell the president to cut where and how he and his team see fit.

There is great anxiety about the idea of giving Obama such a tool. Some worry that the cuts actually enacted would be phony, with agency heads creating expensive programs solely for the sake of saying they were cut. Others worry that it would allow Obama to cherry pick popular items for closure and cuts so as to apply more pressure to Republicans.

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Obama is already doing exactly that. He and his team have enough leeway to make the cuts look as brutal as possible and he will certainly continue to paint doomsday scenarios whatever the case.

And as for achieving the full amount of the reductions, the same folks who warn against empowering the president to cut as he likes are the same ones who say that the cuts themselves are insignificant. Fiscal hawks can argue that every penny counts, but at what cost?

The clock is running on a potential partial government shutdown next month. The sequestration fight allows Obama weeks to rail against Republican cuts before the deadline. The fleabite cuts now will make it harder for Republicans in the more consequential battles ahead and in the Midterm elections. The deadlock could be broken in 2014, and not in a way that Republicans would like.

Offering Obama the authority to make the reductions more sensibly would give the GOP a leg up in the looming fights over the continuing resolution funding the government and the looming battle over the debt limit.

The federal funding fight next month will also give Republicans a chance to try to shift the cuts to programs they think unworthy.

Obama says he won’t accept any changes to sequestration that don’t involve higher taxes for top earners, but would he and Senate Democrats really be willing to refuse the chance? If he did at least Republicans could tell voters that they tried.

As it stands, Obama is getting to tell Americans that this is what Republicans want.

And Now, A Word From Charles

“The president says it doesn't have to happen.  He is right.  All he has to do is say he is prepared to speak to Republicans about shifting accounts, in other words, by having the same amount of cuts by actually, but actually having to make choices, priorities, which is what governing is all about.  And that's why you have a budget.  X is important so it gets support.  Y is less important and it gets cut.  He is saying I'm not going to do that.”

-- Charles Krauthammer on “Special Report with Bret Baier.”

Chris Stirewalt is digital politics editor for Fox News, and his POWER PLAY column appears Monday-Friday on FoxNews.com. Catch Chris Live online daily at 11:30amET  at  http:live.foxnews.com.