THE BLOG
02/06/2013 10:06 am ET Updated Apr 08, 2013

Ryan's About Face on Sequester Shows Lack of Leadership, Jeopardizes Recovery

All along the campaign trail as he sought the vice presidency, Rep. Paul Ryan decried sequestration and its across-the-board, indiscriminate cuts. He said in August that a Romney-Ryan administration would "reverse these reckless, devastating defense cuts that the president is bringing us toward. We will recognize that the primary responsibility of the federal government first and foremost is a strong national defense."

Unfortunately, with two months remaining to find a compromise solution to defuse sequestration and prevent these cuts, Rep. Ryan -- the chairman of the House Budget Committee and his party's leading voice on budget policy -- did a complete about-face.

In a Meet the Press interview on January 27, Rep. Ryan claimed extraordinarily that "sequester is going to happen." Such casual acceptance of such devastating -- and, by design, avoidable -- is a complete abdication of Congressional responsibility, particularly by a leader of the House majority.

At a time when the markets are cheering the recent fiscal cliff compromise and the compromise avoidance of the debt ceiling, Mr. Ryan's churlish insistence that sequestration will not be fixed because the Democrats will not accede to his one-sided plan is a new low in economic brinksmanship in the face of real evidence of recovery. For example, the Standard and Poor's Exchange hit 1,500 on January 25th for the first time in five years, and the Dow is nearing 14,000.

In addition to solid stock market news, housing sales are up, car sales are up, and employment levels have reached pre-2008 figures. With the existential threats of going over the fiscal cliff and defaulting on the full faith and credit of the United States behind us, the last remaining area of self-inflicted damage Washington can create is allowing the budget chainsaw of sequestration to go forward on March 1, 2012.

Under that law, automatic, indiscriminate cuts to medical providers, education funding, and defense programs will trigger. As Defense Secretary Leon Panetta has warned, this will force the immediate layoff of thousands at the Pentagon, to cite just one agency contingency plan. Today, those devastating effects are no longer hypothetical. On January 30, the U.S. Department of Commerce reported that gross domestic product fell at a 0.1-percent annual rate in the fourth quarter of 2012, down from three-percent growth in the quarter before.

The sudden dip is due to uncertainty caused by the threat of sequestration. This uncertainty caused a drop in the defense sector, which fell at an alarming 22.2-percent annual rate in the quarter. Although personal consumption expenditures rose at a 2.2-percent rate, business spending on equipment and software rose at a 12.4-percent rate, and housing investment rose at a 15.4 percent clip, strong performances in those sectors were not enough to offset a severe slowdown in defense spending as the Pentagon and defense firms gird for sequestration.

This situation will be worse if sequestration's cuts are allowed to go forward, and Mr. Ryan's willful acceptance of the cuts -- in lieu of bipartisan efforts to avoid them -- is regrettable.

Further, Mr. Ryan's repeated claim that only his side has presented a plan to defuse sequestration does not come close to comporting with reality. On several occasions, the White House has presented a comprehensive, specific package of spending cuts and tax loophole reforms that easily meet the sequestration target of $85 billion in deficit reduction over 10 years. Further, the budget alternative offered by House Democrats last year avoided sequestration through a balanced combination of spending cuts and new revenue though tax reform. There are other ideas -- many of them bipartisan -- that deserve consideration as well.

If compromise were adopted, the economic "devastation" candidate Ryan accurately predicted in August would be avoided. Subjecting national defense programs to such arbitrary cuts would have far-reaching consequences. The House Armed Services Committee held a half-dozen hearings with Pentagon officials, military leaders and defense contractors large and small who all echoed the damage such a mindless mechanism would inflict.

In testimony before the Senate in 2011, former Republican Senator Phil Gramm -- who teamed up with Democrat Warren Rudman to author the 1985 law on which sequester is based -- said "it was never the objective of Gramm-Rudman to trigger the sequester; the objective of Gramm-Rudman was to have the threat of the sequester force compromise and action."

As recent compromises over the fiscal cliff and other issues have shown, there is still, I believe, a critical mass of members in Congress on both sides of the aisle who are willing to roll up their sleeves and avoid sequestration.

Instead of washing his hands of the process and resigning our budget to an avoidable fate, Mr. Ryan should join with members on both sides of the aisle and in both chambers of Congress to avoid that outcome -- something Vice Presidential candidate Paul Ryan would have applauded.