The Game of Chicken on the Sequester

No talks are scheduled on the so-called sequester—the $85 billion in automatic spending cuts that go into effect Friday night—until deadline day, when Congressional leaders gather at the White House for a ceremonial meeting nobody thinks will accomplish anything.

They and the Beltway punditocracy are resigning themselves to the sequester taking place. Business leaders are shrugging it off and markets and investors are more worried about Italy.

Everyone’s realized, I think, that both sides are playing chicken to placate their political bases and the sequester is just another battle in a long, long war.

Even the media’s panic over the sequester is not as bad as its hysteria about the “fiscal cliff” late last year. That was resolved with a very bad deal, just as the sequester itself was the very bad deal nobody wanted that helped resolve the debt limit disaster of 2011.

But the posturing continues, as each side tries to blame the other for whatever dire consequences will occur because of the meat ax budget cuts.

President Obama and Cabinet members have taken to the airways to warn of furloughs for Defense Department employees, massive delays at airports and pink slips for teachers.

The latter claim, made by Education Secretary Arne Duncan, has been debunked.

President Obama meets Congressional leaders briefly at a ceremony unveiling a statue of Rosa Parks in the Capitol. White House photo/Pete Souza.

President Obama meets Congressional leaders briefly at a ceremony unveiling a statue of Rosa Parks in the Capitol. White House photo/Pete Souza.

Meanwhile, Republican leaders say the whole sequester was the president’s idea. That was backed up by journalist Bob Woodward, who wrote a book about the debt ceiling battle and said in a Washington Post op-ed that the automatic spending cuts were conceived by White House advisers Rob Nabors and Jack Lew (now Treasury Secretary) with President Obama’s backing. (Republicans voted for it, of course.)

That has led to a brouhaha between Woodward and the White House about whether the president lied about this during the presidential campaign. It looks to me as if he did.

The president is counting on polls that show the public will blame Congressional Republicans for any fallout from big spending cuts. He’s continuing the divide-and-conquer strategy he unveiled after the election and used successfully in the fiscal cliff battle, when Republicans caved on taxes for the wealthy. So far it’s working: 61% of the public views him as a strong leader.

And House Speaker John Boehner, already burned twice by his own caucus (during the collapse of “grand bargain” negotiations in 2011 and in his humiliating failure to get his “fiscal cliff” plan through), is unwilling to either raise revenues or negotiate directly with a president his members loathe and distrust.

And as Politico reported, Republicans managed to keep control of the House despite rock-bottom approval ratings, so they don’t believe they have anything more to lose by holding firm.

That means the sequester is likely only the second battle in a continuing war. Next milestone: March 27th, when a continuing budget resolution runs out and the government could shut down. Then, in May, the debt limit runs out again.

So, there are several opportunities for Congress and the president to come up with a sensible deal that might include tax reform and changes in entitlements as well. But there are several opportunities to miss an opportunity, too.

Count on the acrimony continuing, as markets and the public tune out. And in the end, Washington will find a way to get to the worst possible outcome, one only slightly better than doing nothing at all.


  1. A Truce or a Stalemate on the Budget? | The Independent Agenda - March 4, 2013

    […] spending cuts—the dreaded “sequester” –went into effect Friday and  asteroids did not crash into the Capitol building, nor did the  Jefferson Memorial  slide […]

  2. Austerity Hasn't Lost the Battle Yet | The Independent Agenda - April 29, 2013

    […] The European Union in particular has enforced austerity policies on Greece, Spain, and Portugal, exacerbating those countries’ already deep recession. David Cameron’s government in the UK has done it voluntarily. In the US, the Tea Party movement that has taken over the Republican Party has forced $3 trillion of deficit cuts, including the current “sequester.” […]

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