We are in the midst of the blame game about the "sequester." I wrote last year about the fact that President Obama had twice blocked Republican efforts to remove the sequester. President Obama went so far as to issue a veto threat to block the second effort. I found contemporaneous reportage on the president's efforts to preserve the sequester -- and the articles were not critical of those efforts. I found no contemporaneous rebuttal by the administration of these reports.
In fairness, the Republicans did "start it" by threatening to cause the U.S. to default on its debts in 2011. Their actions were grotesquely irresponsible and anti-American. It is also true that the Republicans often supported the sequester.
The point I was making was not who should be blamed for the insanity of the sequester. The answer was always both political parties. I raised the president's efforts to save the sequester because they revealed his real preferences. Those of us who teach economics explain to our students that what people say about their preferences is not as reliable as how they act. Their actions reveal their true preferences. President Obama has always known that the sequester is terrible public policy. He has blasted it as a "manufactured crisis."
The administration has stated publicly the three reasons this is so. First, the sequester represents self-destructive austerity. Indeed, it would be the fourth act of self-destructive austerity. The August 2011 budget deal already sharply limited spending and the January 2013 "fiscal cliff" deal raised taxes on the wealthiest Americans and restored the full payroll tax. The cumulative effect of these three forms of austerity has already strangled the (modest) recovery -- adding the sequester, particularly given the Eurozone's austerity-induced recession, could tip us into a gratuitous recession.
Second, the sequester is a particularly stupid way to inflict austerity on a nation. It is a bad combination of across the board cuts -- but with many exemptions that lead to the cuts concentrating heavily in many vital programs that are already badly underfunded.
Third, conservatives purport to believe in what Paul Krugman derisively calls the "confidence fairy." They assert that uncertainty explains our inadequate demand. The absurd, self-destructive austerity deals induced or threatened by the sequester have caused recurrent crises and maximized uncertainty. They also show that the U.S. is not ready for prime time.
When he acted to save the sequester, Obama proved that he preferred the sequester to the alternative. When the alternative threatened by the Republicans was causing a default on the U.S. debt (by refusing to increase the debt limit), one could understand Obama's preference (though even there I would have called the Republican bluff). The Republicans, however, had extended the debt limit in both of the cases that President Obama acted to save the sequester in 2011.
Similarly, President Obama has revealed his real preferences in the current blame game by not calling for a clean bill eliminating the sequester. It is striking that as far as I know (1) neither Obama nor any administration official has called for the elimination of the sequester and (2) we have a fairly silly blame game about how the sequester was created without discussing the implications of Obama's continuing failure to call for the elimination of the sequester despite his knowledge that it is highly self-destructive.
The only logical inference that can be drawn is that Obama remains committed to inflicting the "Grand Bargain" (really, the Grand Betrayal) on the nation in his quest for a "legacy" and continues to believe that the sequester provides him the essential leverage he feels he needs to coerce Senate progressives to adopt austerity, make deep cuts in vital social programs, and to begin to unravel the safety net. Obama's newest budget offer includes cuts to the safety net and provides that 2/3 of the austerity inflicted would consist of spending cuts instead of tax increases. When that package is one's starting position the end result of any deal will be far worse.
In any event, there is a clear answer to how to help our nation. Both parties should agree tomorrow to do a clean deal eliminating the sequester without any conditions. By doing so, Obama would demonstrate that he had no desire to inflict the Grand Betrayal.