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Tag: sequester
Republicans Know Deficits Don’t Matter (When They Control Spending)

Republicans Know Deficits Don’t Matter (When They Control Spending)

“No politician (has) ever lost office for spending more money.” Donald Trump reportedly relayed this message from Mitch McConnell to his staff recently, and you can see that philosophy at work in the two-year budget deal he just struck with Congress.

In exchange for putting off the debt ceiling for two years, Trump agreed to eliminate the discretionary spending sequester—automatic spending cuts authorized in 2011 but continually nullified in the ensuing decade—which translates into $320 billion in new spending. This increase is partially offset by the extension of some customs fees and Medicare reimbursement caps that maintain the status quo.

While sequester waivers have become routine, the trend lines on spending point to something really different under Trump. Barack Obama and a Republican Congress cut discretionary spending by an average of 2 percent per year in his second term; so far Trump and Congress have increased it by 4 percent every year in office. And this accounts for much the economy’s resiliency in the Trump era, alongside the tax cuts he highlights.

The Brookings Institution Hutchins Center Fiscal Impact measure shows fiscal policy contributing to GDP growth since the end of 2017 by a rising margin, peaking at 0.86 percent in the first quarter of this year, a figure that will only rise with this new budget deal. As Justin Fox points out, the shift from fiscal policy detracting from growth in Obama’s last six years to contributing to growth under Trump accounts for the entire increase in GDP since 2017.

The point here is that old-fashioned federal spending works to increase demand and boost growth. None of the negative side effects we constantly hear about—public spending “crowding out” private investment, or deficits leading to runaway inflation—have materialized since the Great Recession. We had a persistent demand shortfall, and when government finally decided to fill it, the economy accelerated. This may be a spending theory more associated with liberals, but it’s certainly assisted the last two conservatives in the White House.

You will hear Republicans come back to these declarations about the evils of government spending as soon as a Democrat takes the oath of office and occupies the White House. While Obama’s economic team did prefer pivoting to deficit reduction after the first two years of stimulus, Republicans angrily denounced his presumably profligate spending at every opportunity. They demanded the sequester, and assorted budget cuts and caps along the way. They took every opportunity to reduce public investment as soon as they took control of the House in 2011. By 2013, public investment was at its lowest level since the Truman administration, according to The Century Foundation.

Republicans, in short, adopt situational ethics about spending—stiffly opposed when a Democratic president would sign the bill, broadly in support when a Republican wields the pen. Not coincidentally, these tendencies translate into throwing a wet blanket on economic growth in the Democratic years, and pumping it up in Republican years.

Of course, GOP officials are all too happy to performatively restrict spending on the very poor—applying work requirements to Medicaid, for example, or limiting states from maximizing access to food stamps. But these should rightly be seen as social and not fiscal policies, meant to reverse allegedly unfair handouts to people who don’t vote for them. The spending itself is a means to an end, and the aggregate level rises and falls depending on which party might benefit in elections.

Democrats should not be expected to play a similar game of demanding austerity depending on the White House’s occupant. Unlike Republicans they wouldn’t harm the economy for political gain. No, they do something far worse: Acting as responsible stewards, they seek to handcuff themselves in office by forwarding deficit reduction packages, sabotaging their own economies in the process. Both the Clinton and Obama administrations paid close attention to deficits, egged on by Republican legislatures but to some degree in on the game themselves.

The current incarnation of the Democratic Party sets up more to the left of those past administrations. Still, there are a few things they could fight for more strongly. For one, discretionary budget “parity”—an equal amount of spending in the discretionary budget on defense and non-defense items—has become a sought-after goal. Another way of saying that is that the government spends as much on the military as it does on every other non-mandatory program in the budget combined. But why should that be the standard? The fight should seek to have non-defense discretionary exceed military spending by a wide margin.

Second, in this particular case, Democrats agreed to pass an emergency supplemental spending bill at the border outside of the two-year budget deal. That seems to me to be an unnecessary relinquishing of leverage. Trump very obviously did not want to engage in any brinksmanship over the budget: Pairing that to the standards many Democrats wanted for the treatment of immigrants and refugees in the border supplemental, or at least trying to do so, would have been a strong move.

The budget deal also didn’t salt the debt ceiling under the earth, which many progressives see as an unforgivable error. I don’t. Under House rules, any time a budget resolution passes, the debt ceiling is deemed lifted; this is known as the Gephardt rule after the former Democratic House Majority Leader. The Senate doesn’t have such a rule, which is why we’ve had this trouble with debt extensions this year. Win the Senate and adopt the Gephardt rule and the debt ceiling problem goes away. McConnell doesn’t willingly give away leverage; it will have to be taken.

What McConnell does engage in, like his Republican colleagues, is runaway spending as long as a Republican is president. The hypocrisy of the cries of deficit hysteria from the GOP under Obama is certainly galling. But we should heed the lessons available here. Fiscal policy works. The warnings against it have yet to come true. Democrats should not apply brakes to themselves on spending if they get the chance. And if Republicans try the same special pleading for austerity under the next Democratic president, well, that’s what nuking the filibuster is for.

Defense Concerns Revive Obama’s Call To End Sequestration Budget Caps

Defense Concerns Revive Obama’s Call To End Sequestration Budget Caps

By W.J. Hennigan and Lisa Mascaro, Tribune Washington Bureau (TNS)

WASHINGTON — President Barack Obama revived his call Thursday to end federal spending limits linked to a last-resort deficit deal reached nearly four years ago, an appeal that fell squarely in the divide between Republicans in Congress who want to rein in costs and those who want to boost the Pentagon’s budget.

Obama has repeatedly asked Congress to “fully reverse” the so-called sequestration cuts that were part of a 2011 deal and intended to be so unpalatable they would never be enacted. But they took effect in 2013 after lawmakers failed to reach a compromise to avert them. The president’s pleas to lift the restraints have produced only temporary, and partial, changes.

But changing circumstances could give new life to Obama’s requests, at least on defense spending. A shrinking deficit, a new Republican-led Congress and the Pentagon’s need to fund the six-month-old fight against Islamic State militants who continue to seize land and terrorize cities across Iraq and Syria could work in the president’s favor.

“This administration has been very clear, as have our military leaders, about the fact that sequestration is a bad policy,” White House spokesman Josh Earnest said Thursday. “It’s certainly been bad for our economy, and it’s bad for our national security as well, and that’s why the president proposes to end it.”

Though Republicans are eager to see the Pentagon fully funded, the prospect of lifting the spending caps runs up against another core GOP tenet — limiting government spending. An internal struggle centers on that split between defense and deficit hawks.

“There’s debate going on,” said Sen. Jim Risch (R-ID). “It’s been a standoff, as you know. I have not seen either side running up the white flag.”

The president is asking lawmakers for $561 billion in defense spending, an increase of $38 billion over the congressionally mandated budget caps, which includes the Pentagon’s largest base-line budget request ever. On top of that, the military is set to receive $51 billion in war funding.

Obama’s plan also includes $530 billion in domestic expenditures, an increase of $37 billion over this fiscal year.

Congress’ new Republican majority could be interested in repealing the spending limits, especially on national security. But few Republicans are willing to stomach Obama’s proposed tax increases to pay for his expanded budget.

“Until he gets serious about our long-term spending problem, it’s hard to take him seriously,” said Cory Fritz, a spokesman for House Speaker John A. Boehner (R-OH).

Republicans prefer shifting the money around — aiding the Pentagon by cutting into the vast system of domestic programs they say is bloated. In the past, Republicans have suggested cuts to food stamps, Obamacare and programs to help homeowners who owe more on their mortgages than their homes are worth, among others.

“The House of Representatives has passed several replacements for the president’s sequester, only to have them ignored,” said Rep. Mac Thornberry of Texas, the Republican head of the House Armed Services Committee.

Obama’s new plan is unlikely to gain traction, budget analysts say.

“The president is facing an exceedingly difficult situation in Congress,” said Ryan Crotty, the deputy director at the Center for Strategic and International Studies. “It can’t try to increase spending and be everything to everyone. Because, in the end, no one’s going to be happy.”

Still, Obama faces a deadline to ward off the worst of the cuts.

When Obama and Congress initially agreed to slash spending, neither really thought it would happen. The cuts were considered so terrible — $1 trillion worth of deep reductions over the decade, across almost every aspect of government — that they would force the parties to broker a compromise.

But they went into effect after Congress failed to reach deal.

Their full brunt never really took hold, however. A subsequent pact brokered in 2013 between Rep. Paul D. Ryan (R-WI) and Sen. Patty Murray (D-WA) temporarily undid some of the reductions.

That reprieve ends Oct. 1, when the new fiscal year begins. Without agreement by then, Washington could see another major confrontation between the White House and Capitol Hill.

“If Congress rejects my plan and refuses to undo these arbitrary cuts, it will threaten our economy and our military,” Obama wrote in an op-ed in the Huffington Post.

Rep. Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, said how the budget plays out would depend on the debate within the Republican caucus over whether to relent on spending in order to support the military.

“Two years ago, there was a recognition among most Republicans that the defense caps should be readjusted, and the result of that was the Ryan-Murray agreement,” he said. “So I would hope that we can move forward on some kind of similar agreement.”

To warn against the negative effects of cuts, top uniformed officers of the Army, Navy, Air Force and Marine Corps testified Wednesday on Capitol Hill about how their services would be devastated.

The Joint Chiefs of Staff, as they’re known, said that the spending freeze affected the military’s ability to be ready for battle and slowed the modernization of weapons, which made it impossible to plan.

The last year saw a number of unforeseen national security threats, they said, including the battle against the Islamic State group, a resurgent Russia in Ukraine and other events that demanded military action such as the spread of Ebola in Africa.

“Sequestration will erode the trust that our young men and women in uniform, civil servants and families have in their leadership,” said Gen. Joseph F. Dunford Jr., commandant of the Marines. “And the cost of losing that trust is incalculable.”

In a study released in April, the Pentagon outlined the impact of spending cuts, including a reduction in the number of active-duty soldiers in the Army from 470,000 to 420,000. Other effects include the retirement of a Navy aircraft carrier and scrapping the tankers that refuel fighter and bomber jets in midair.

Obama’s open-ended strategy to confront Islamic State fighters in Iraq and Syria has cost $1.3 billion since it began in August, according to the Pentagon. Although that’s a pittance compared with the total Pentagon budget, or the separate $1.3 trillion spent for the ground wars in Iraq and Afghanistan, the costs of intervention are certain to increase under the plan to step up airstrikes, intensify surveillance and conduct counterterrorism operations.

Despite the budget uncertainty, the Pentagon has moved forward with big-ticket purchases that stretch for decades, including a $348 billion nuclear weapons modernization effort that involves new bombers and submarines, as well as the $400 billion F-35 Joint Strike Fighter jet program.

“The Department of Defense has not prepared the services or the contractors for any budget cuts,” said Todd Harrison, defense analyst at the Center for Strategic and Budgetary Assessments. “They seem to be in denial about the whole thing.”
___

Staff writers Kathleen Hennessey in Washington and Michael A. Memoli in Philadelphia contributed to this report.

Photo: U.S. President Barack Obama speaks at a event to promote a new health care program by approving $215 million for a Precision Medicine Initiative designed to help doctors tailor treatments to the individual characteristics of their patients in the East Room of the White House Jan. 30, 2015 in Washington, D.C. (Olivier Douliery/Abaca Press/TNS)

Uncompromising Congress A Threat To National Security

Uncompromising Congress A Threat To National Security

By Rekha Basu, Des Moines Register

Many of us around the country have had about enough of the intense political divisiveness showing up in campaign ads. But our angst apparently is nothing compared to the frustration being felt in the nation’s capital on both sides of the political aisle. There, members of the defense establishment believe the partisan divide is actually undermining our national security.

At a two-day national security conference in Washington, D.C., sponsored by Northwestern University’s Medill School of Journalism this month, speaker after speaker voiced the same frustration over the budget sequester and the failure of Congress to negotiate.

“Congress is about as worthless an outfit as I’ve seen in 40 years,” declared Arnold Punaro, a retired Marine Corps. major general, who chairs the National Defense Industrial Association and the Reserve Forces Policy Board, which advises Defense Secretary Chuck Hagel on Reserve and National Guard matters.

“The sequester is one of the stupidest things Congress has ever done.”

Yet that “worthless outfit” holds ultimate power over our national security, Punaro said. The defense budget that came out of the sequester’s automatic spending cuts is both bloated and insufficient to meet current military demands, he said.

He predicts that in ten years, the United States will have a fighting force that is both too small and unprepared to deal with the new nature of the threats we face while “health care costs and entitlements are turning DOD into an entitlements company that occasionally kills a terrorist.”

We might disagree on those entitlements, but Punaro is worth listening to when he says we can’t use the same deterrence methods to deal with ISIS as we did to deal with the Soviets during the Cold War, without getting to the root causes of the fight.

In an interview with USA TODAY, Leon Panetta, President Obama’s former defense secretary, recently said Obama should not have warned Syria’s President Bashar al Assad against using chemical weapons and then failed to follow through in 2013. Panetta said the empty threat left international allies reluctant to join us in fighting ISIS. Obama wanted congressional authorization — in my view, appropriately — which he didn’t get.

But it’s one thing to say we want members of Congress to stop pointing fingers and cooperate, and another to hear experts say we are less safe because of their failure to do so.

Michele Flournoy was undersecretary of defense for policy from 2009 to 2012 and now is CEO of the Center for New American Security. She shares the view that the failure to get a “rational” budget deal and the paralysis of Washington will become a national security issue, breeding a lack of confidence in the United States and opening the door for terrorism.

“It will hurt us in our ability to lead and in the perception of us as a power,” said Flournoy, who was principal adviser to the defense secretary on security and defense policy.

She says there are workable solutions, but the politics, rather than the substance of the disputes, is blocking them. Members of Congress fear they won’t win primaries if they are seen as working with the other party.

“Now the most dangerous thing you can do is agree to compromise,” said Flournoy.

“My fear is that something really bad will happen. We will have some operational failure because we were penny-pinching.”

Lt. Gen. Jeffrey Talley, senior leader for the U.S. Army Reserve, said sequestration is affecting its force.

“I’m 20 percent of the total Army but 5.8 percent of the Army’s budget,” he said noting the majority of U.S. Army missions, including now fighting Ebola, “can’t be done without us.”

Congress funds only 39 days of training for the Reserve a year.

When the government shut down a year ago, training for the Army Reserve and the National Guard was halted. The Guard and Reserve account for just under half of the 2.3 million men and women in uniform.

Joseph Collins, a retired Army colonel who served in the Pentagon for a decade and was active in the early planning of the Iraq and Afghanistan wars, is now a director at the National Defense University. He argues that the U.S. is “pricing ourselves out of superpower status,” and Congress should be closing unnecessary military bases that cost too much to maintain. Taxpayers are also “spending huge amounts to modernize the nuclear arsenal,” though nuclear weapons are redundant, he said.

“This government is not going to work if the Congress won’t do the work it’s supposed to,” he said.

From my view, the blame is not equally shared between the two parties. The Tea Party element has pushed Republican members of Congress to the far right and made it a matter of honor not to negotiate with the president.

“Our revolution was a compromise,” said Punaro, who also noted the corrupting effect of political spending by outside groups on our politics. “Our Constitution is a compromise.”

Here’s the bottom line: How can we expect to win any foreign wars if some of our elected leaders have made their top priority being at war with each other?

Photo: Speaker Boehner via Flickr

Rekha Basu is a columnist for the Des Moines Register. Readers may send her email at rbasu@dmreg.com.

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