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Cohen writes: "The United States economy will undergo the first stages of shock therapy - $85 billion in across the board spending cuts to defense and other domestic spending programs that will have devastating consequences in the US economy."

Cohen: 'There is one constant in the repeated failure to reach agreement: GOP obstinacy over tax increases.' (photo: unknown)
Cohen: 'There is one constant in the repeated failure to reach agreement: GOP obstinacy over tax increases.' (photo: unknown)



Thank Republicans for the Sequester Showdown

By Michael Cohen, Guardian UK

03 March 13

 

oday the United States economy will undergo the first stages of shock therapy – $85 billion in across the board spending cuts to defense and other domestic spending programs that will have devastating consequences in the US economy. By some estimates the cuts will cause a half-point decline in GDP and will cost the economy a million jobs over the next two years. There is a very simple reason why this is happening: Republicans don't want to raise taxes.

Seriously, that's the reason. If we go back to the beginning of the manufactured fiscal and budgetary crises that have dominated American politics since Republicans took over Congress in January 2011, there is one constant in the repeated failure to reach agreement: GOP obstinacy over tax increases. It has become line in the sand issue for modern Republicans – not deficit reduction; not reducing government size. Those are talking points. It is taxes – above all – that gets Republican blood pumping.

While the country narrowly avoided a government shutdown in the spring of 2011, our current dilemma really begins with the debt limit crisis of the same year. Republicans declared their intention to hold the country's debt limit hostage – and raise the possibility of debt default – in return for massive deficit reduction from the Obama White House.

President Obama, perhaps wrongly, agreed to meet them halfway. He proposed cuts in domestic spending and even endorsed the controversial notion of increasing the Medicare eligibility age from 65 to 67. In return, he demanded that Republicans meet him not even halfway with an equal mix of tax increases and spending cuts, but rather a third of the way with a proposal for $3bn in spending cuts and $1bn in revenue hikes.

But the so-called Grand Bargain failed not because Obama didn't go far enough, but because Republicans simply wouldn't budge on tax increases. As John Boehner said at the time about debt limit talks, "These conversations could continue if they take the tax hikes out of the conversation." According to House Majority Leader, Eric Cantor, "There is not support in the House for a tax increase."

Simply put, as long as Obama demanded tax increases – even minimal ones – there would be no opportunity for a deal. Not surprisingly the so-called Super Committee, assembled to avoid sequestration, could not reach a deal because of continued GOP intransigence on taxes. The rigid dogmatism of the GOP position was placed in even sharper relief in August 2011, when candidates were asked at a Republican presidential debate in Iowa to raise their hand if they would accept a deal that cut ten dollars from the deficit in spending for every one dollar in tax increases. None raised their hand.

This uncompromising position on taxes didn't win Republicans the White House, but that still had little impact on Republican officeholders. Only when faced with the possibility of a far larger tax increase with the expiration of the Bush tax cuts were 85 Republicans in the House willing to swallow the reality of higher taxes (Senate Republicans were far more amenable). Although it should be noted that the GOP fought tooth and nail for a deal, not that reduced the deficit (a key stated goal of Republicans) or cut spending (an ideological touchstone for conservatives), but rather ensured that couples making between $250,000 and $450,000 a year were protected from a slight increase in their tax rate. The fact that the final fiscal cliff deal actually increased the deficit by $4tn was of less concern.

Now we have the latest showdown. A key demand of Republicans is that the president puts spending cuts, particularly those to social insurance programs, on the table. He's done this. Indeed, the president's current proposal, which is available on the White House website, has about $930bn in new spending reduction – approximately $400bn of that to Medicare and Medicaid, and more controversially, $130bn in reduction to Social Security benefits.

The catch, of course, is what is also being demanded - $580bn in tax increases. These aren't even rates hikes, but rather reducing deductions utilized by wealthier Americans – the sort of tax reform measure that Republicans have long said they support.

Even though such a balanced approach is supported by three-quarters of all Americans; even though Americans will, if polls are correct, hold the GOP responsible for the impact of sequestration; even though Obama's strategy would reduce the deficit; even though cuts to social insurance programs would inflame the president's liberal supporters; even though Obama's plan would stop defense cuts (which Republicans hate); even though it would prevent widespread damage to the economy, which has the potential to boomerang against GOP incumbents on the ballot in 2014 … Republicans are not interested.

It is perhaps the most remarkable example of political folly, combined with political delusion and a healthy dose of political surrealism, that Washington has seen in quite some time – and that is truly saying something. Obama's proposed plan is, considering the circumstances, not a good deal for Republicans, but IT'S A GREAT DEAL. It is highly unlikely that they can do much better than this if sequestration happens, and, in fact, they are far more likely to find themselves under pressure to make a worse deal once the effect of billions in spending cuts go into effect. But anti-tax dogmatism drives all.

Honestly, it sometimes feels like the zealots at Masada were more open to compromise than House Republicans. And while the zealots fought for god, Republicans are staking their ground on more temporal ground – namely ensuring rich people do not pay a penny in additional taxes. The only story that one needs to understand about the sequestration is that it will happen because Republicans won't raise taxes. End stop. Period.

Yet this simple message is not getting through to the pundit class, who appear to be searching for every reason other than GOP anti-tax inflexibility to explain the failure to reach a deal avoiding sequestration. The fairy of political equivalence and "bothsidesaretoblame" punditry necessitates that responsibility for budgetary crises must not be affixed. For example, David Brooks denied President Obama even had a proposal for replacing the sequester (a position he later backtracked on –ish). It's right here. The Washington Post editorial page also accused Obama of not having a serious negotiating strategy. Again it's right here – and features elements that the Post has long supported. Indeed, the Post criticized Democrats for being "increasingly intransigent on entitlement reform" – even though they have put forward approximately $500bn in proposed entitlement cuts, which is about $500bn more than Republicans have proposed.

Ron Fournier of the National Journal, who has become the poster child for policy agnostic, "bothsidesaretoblame" centrism argues that Republicans "aren't telling the truth" when they say there is no possibility of compromise. "Even in this era of stubborn partisanship, both Obama and the GOP-controlled House have incentive to bend," says Fournier, even though every piece of evidence suggests the opposite is true. According to Fournier, "it is not leadership to merely blame the GOP and attack the media." Actually, he's right. It's not leadership – it's a fact that Republicans don't appear to have any interest in reaching a deal.

The reality is that whether one likes Obama or thinks he is the Antichrist, facts are facts: he has offered Republicans a Grand Bargain compromise repeatedly over the past 18 months. He has made concessions on key liberal priorities, like Medicare eligibility and Social Security benefits. He signed into law huge cuts in domestic spending without matching revenue hikes. And in return, all he has asked of Republicans is to support rather tepid increases in taxes. They have refused; and they have refused for the same reason every time.

Why is this so hard to understand?

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+6 # Walter J Smith 2013-03-03 09:15
Well, yes, this is true: "Today the United States economy will undergo the first stages of shock therapy – $85 billion in across the board spending cuts to defense and other domestic spending programs that will have devastating consequences in the US economy. By some estimates the cuts will cause a half-point decline in GDP and will cost the economy a million jobs over the next two years. There is a very simple reason why this is happening: Republicans don't want to raise taxes."

And it is the most popular half of the whole truth - as seen on the left side of cyber-media.

The other half of the truth about why the sequester is shrinking the government & economy is that even though Obama saw this coming (it was a no brainer since all the rest of us saw it coming, too), Obama was, as he has consistently been since 2008's election, anxious to capitulate to the right wing GOP in the face of any challenge to his luminous superiority.

This time Obama did it in public, before the world: "President Barack Obama said Friday that he would not risk a government shutdown in an effort to avert the sequester...." http://www.rollcall.com/news/obama_wont_risk_shutdown_over_sequester-222767-1.html

After that cave in on Friday, the GOP knew it had won.

Obama, like the GOP, is playing a very risky game: "Who can be the stupidest the fastest?"
 
 
+31 # 666 2013-03-03 09:17
quoting"There is a very simple reason why this is happening: Republicans don't want to raise taxes."

Michael, let's get the facts straight, they GOP doesn't want to raise taxes on the 2%!! They are happy to raise them on the rest of us (or haven't you looked at your paychecks after Jan 1?)
 
 
+1 # RLF 2013-03-03 11:49
There is plenty of blame to go around here. Both houses and the president didn't think that tax policy was something to bother with in the first two years of his presidency, when they were in power. They didn't cut the military or any other republican baby because they are they same bunch of butt holes, working for the same bunch of rich butt holes.
 
 
+20 # tswhiskers 2013-03-03 10:15
I suspect anyone living outside the U.S. is fairly amazed at the seeming madness of the Congress, and many of us Americans solidly agree with you. The Reps. in Congress have been playing a steadily riskier game of Chicken with the American economy since they won the House in 2011. They insist that our economy must look like those of Greece and Spain which to them are successful economies apparently. Until primary elections are seen as important as the usual elections in this country, we will continue on the road to Greece and Spain.
 
 
+15 # Tiffany49 2013-03-03 10:31
I think they are enjoying the pain they are delivering to our nation. What cruel human beings!
 
 
+21 # Regina 2013-03-03 10:49
Their real goal is to punish the lowly hordes who succeeded in reelecting Obama, despite all their shenanigans to keep the "takers" from voting. The sequester will hurt most the people who have the least resources, deliberately and with malice on the part of our Royalist Party. We're now into the fifth year of their spite, and there is no end in sight.
 
 
-17 # kevin_k 2013-03-03 10:56
It's not "shcok therapy", and it won't have "devastating consequences". For that matter, it's not "$85 billion" ($43B is actually slated for next year but budgeted in this one) and it's not even a "cut": before the sequester, the 2013 budget represented a $150B *increase* over 2012, so even including the sequestration, the federal government will still spend $100B more this year than last.

A 1.2% difference is not "devastating". It's barely a rounding error.

Why is a barely-1%-chang e in spending portrayed as the end of the world, yet tax increases (for all taxpayers) greater than that aren't?
 
 
+8 # theory≠opinion 2013-03-03 13:39
If it's such a little deal, why are people losing their jobs and getting furloughed? If it were as you say, they wouldn't even be able to notice the change in their paycheck, let alone losing work?
 
 
-9 # kevin_k 2013-03-03 14:26
If what's "as I say"? The numbers are there, for public review. Any furloughs or layoffs are either:

- being done for show
- were already planned but are being blamed on the sequester
- the result of a public sector union refusing an inch and choosing layoffs

It's ONE PERCENT. if you choose not to believe the $42B sleight-of-hand it's TWO PERCENT - and (again) STILL an increase over the 2012 budget. That's *their* math, not mine.
 
 
+7 # RLF 2013-03-03 11:51
I haven't seen a single article this last week that made the point that pending cuts much deeper than these are needed to get military spending back where we can live with it. We need to get the military to where we could "drown it in a bath tub"!
 
 
+7 # Janice 2013-03-03 12:08
These people in congress are "drunk" with their power. I can not wait for 2014 to vote these mean ugly people out of office. Corporations better enjoy their corruption because it will soon END.
 
 
+12 # fredboy 2013-03-03 12:08
I think it is hilarious that Republicans, who claim to love the U.S. Military so much, are now draining Defense coffers and furloughing thousands and thousands of Defense workers.

If Defense "leaders" (many are simply glorified self-serving bureaucrats) quit whining and cut some of the enormous layers of fat and waste, they may earn slight respect from the rest of us. But that won't happen--they, like their vampirish GOP brethren, want it all. And to hell with everyone and everything else.
 
 
+13 # reiverpacific 2013-03-03 12:12
Didn't somebody on the flick'rin' screen (I seldom watch it) just put it out that the Reprehensibles are just wreaking revenge and social havoc for their recent drubbing in the national elections and the statistically-p roven status of the current Congress as less popular than an infestation of cockroaches (I'm not making that up)?
But like Hiller and all of such narcissistic and megalomaniacal mindsets, it's everybody else's fault but theirs and will learn nothing as long as they get to have power over the rest of us.
You have to take this power away.
I know that many where I live, especially in the small business community including my wife and I, have had a long, hard spell of a "wait and see" mindset but were hoping, in the light of a few encouraging signs from on high, to see a shift towards some small upturn this spring. But these bastards who claim to be the friends of free enterprise have now done their mean-spirited best to knock that on the head and Obama continues to try and "compromise" with the unreachables!
He needs to get the gloves off or go down in history as a soft-peddler.
 
 
+13 # theory≠opinion 2013-03-03 13:27
No, Michael, their immediate goal is to shrink government down to the size where they can drown it in the bathtub. They will do it by any means necessary and the sequester is a great tool along the way. Their long term goal is to unravel the New Deal and all of the gains progressives made in the 20th century and go back to the Gilded Age. Big picture.
 
 
+4 # Abigail 2013-03-03 14:15
Are Congresspeople and Senators still getting paid? Or does the sequester include cutting their salaries off? And the President's?
 
 
+1 # theory≠opinion 2013-03-03 15:50
If it applied to them, it would mean that 10 of them would be out of a job or else they'd all take a pay cut. Neither has happened. Clearly this is not an across the board cut or else they have absorbed the cut by cutting staff and other little people.
 
 
+1 # DPM 2013-03-03 17:34
The Republican party, as it stands today, needs to be eliminated. The president is not a leader. And, the Democrats stand around and collect their pay without doing much more than whining.
This government does not work for the people of this country. It needs to go. We need to begin again.
 
 
+2 # athenalong 2013-03-03 23:28
"There is a very simple reason why this is happening:" Republicans don't take kindly to having an African-America n CIC. Point. Blank. And -several- periods.

This has LONG BEEN the elephant in the room that NO ONE seems to ever want to admit. You know it, I know it, we all know it.

I'd respect them more if they just said it. But it's soooo much easier (and more shrewd) for them to help perpetuate the stereotype of Black 'incompetence' and 'inferiority' (because it's culturally accepted).

And feeding their frothy base (the have nothings and the have everythings alike) with these manufactured 'examples' of his 'ineffectivenes s,' and creating a maelstrom of distraction to deflect their culpability for all of this dysfunction and destruction has been working so well, they remain encouraged to keep this nonsense going.

Racial resentment and jealousy (Obama is a very handsome, well liked, accomplished, and talented dude) has been fueling this fire from the beginning, and continues to maintain it. I wish people would just call it what it is.
 

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