The Kinder, Gentler Sequester

Bill Scher

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Source: National Review

The Murray-Ryan budget deal neither maintains nor repeals the sequester. Instead, as you can see in the chart above, it creates a kindler, gentler sequester.

The original sequester drove the budget baseline down to a low point in 2014, then allowed the rate of spending to increase as the same pace as before. The new deal creates two-year bridge, boosting short-term spending, avoiding the pain of hitting rock bottom next year, but reconnects with sequester’s baseline in 2016.

If you are a liberal, you hate it for effectively keeping the sequester. If you are a conservative, you hate it for making it kindler and gentler.

More seriously, liberals are concerned that we are still on a long path of austerity. Conservatives are concerned that if Republicans couldn’t hold the line on sequester today, who is to say they won’t flinch come Christmastime in 2015, and further unravel the sequester?

That’s the funny thing about budget deals. They are as good for as long as they last.

Many liberals were livid with President Obama in December of 2010 for accepting a two-year extension of the Bush tax cuts for the wealthy, on the presumption that if he conceded in 2010 he would certainly do the same in 2012, keeping the Bush tax cuts in place forever. But the political dynamics after the 2012 elections were vastly different than the 2010 elections, and Republicans were forced to give up their dreams of a low top tax rate.

We don’t know what the political landscape will be in December 2015, so we can’t know what the right half of the above chart will end up looking like.

What we do know is social programs and the military will be a little better off for the next two years than they would if the sequester remained as is. As the Center for Budget and Policy Priorities explained, “the package should not increase poverty, hardship, or inequality and likely would increase funding over the shrunken 2013 levels for discretionary programs such as Head Start that serve low-income families.”

But that proclaimation will only prove true if Congress gets around to extending emergency unemployment insurance, which Republicans refused to include in this deal. CBPP warns, “Failing to extend jobless benefits will put a drag on the economy about as large as the Macroeconomic Advisors’ estimate of the boost provided by easing the sequestration cuts.”

Also, we don’t know yet how congressional appropriations will implement this package. The Murray-Ryan deal sets budget caps. It doesn’t specify which programs get what.

That’s what House and Senate Appropriations do. At least, that’s what they used to do until Congress got stuck resolving Republican hostage-taking operations with last-minute stopgap bills that put budgeting on auto-pilot.

The new deal promises a return to normal budgeting, which should be good. Human beings can once again determine which programs deserve boosts and which ones don’t.

But it also means activists need to vigilant. Without relentless birddogging, programs for the poor could get sliced in favor of other programs backed with more lobbying clout.

Once we do our hardest to make the most out of this deal, the budget battle will have to rejoined after the midterm elections. The better they go, the more leverage we will have.

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