Matt Yglesias had an article out today discussing the impact of the sequester and the relative success of the Obama administration in negotiating a sequester whose incidence primarily falls on (relatively) less important government spending and services:

Long story short, the Obama administration should be somewhat embarassed by its own overblown rhetoric about sequestration but the main reason sequestration is proving survivable is that the administration did a good job of negotiating its terms. Canada isn’t going to take advantage of those Pentagon furloughs to invade. Hospitals aren’t turning away elderly patients. There’s some real waste in federal spending, and despite the crude nature of the instrument the White House did an excellent job of mostly making the ax fall on the waste rather than highly effective programs like Socal Security and SNAP.

I understand where Yglesias is coming from, and this might be nitpicking to some extent, but I have to say that I completely disagree with his point about the administration successfully negotiating its position. On the broader spectrum of possible governmental fiscal policy, we could be doing anything ranging between broadening budget deficits and enacting fiscal stimulus to closing budget deficits entirely by cutting essential government services (like insurance).

Optimally, we would be widening budget deficits and engaging in fiscal stimulus. A more moderate position would involve enacting a Grand Bargain type solution, and least optimally of all, we would be closing budget deficits rapidly by cutting spending. Clearly, sequestration is much much closer to the absolute conservative end of the spectrum than the absolute liberal; as such, the fact that any sort of fiscal policy consisting entirely of spending cuts exists at all is evidence, to me, of very poor negotiating by the Obama administration.

Now, I understand that Yglesias is basically saying that Sequestration could have been worse than it is, and I guess its laudable (at this point) that the administration tries to make the best of the situation. But the fact that there is any sort of salvageable situation at all is a testament to the poor design of sequestration–it was supposed to be the nuclear option; political suicide for everyone if it occurred. However, both sides kept key policy priorities safe from sequestration (SS/Medicare/tax rates/Veterans benefits) to begin with, which meant that not agreeing to a ‘grand bargain’ was merely unpleasant, not the end of the world. And republicans are much happier living in an unpleasant world where government spending is slashed than democrats are. For that reason, I think the Obama administration absolutely bungled fiscal policy w/ regard to the sequestration, and I don’t think the fact that they are kinda sorta making the best of a terrible situation makes up for that in any way.


One thought on “Sequestration

  1. Physician for Equity

    If you can cut 10% of discretionary fat and no one notices, I say cut 50% of discretionary fat and lower taxes. The government should be the smallest size possible to maintain essential services and nothing more. Privatize most government agencies. Stimulate the economy with PRIVATIZATION programs, not more government run programs, government employees, government bureaucracy, and government waste.


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