Americans often boast that their Constitution is one of the jewels of the 18th-century Enlightenment, created by Founding Fathers who understood the need for the separation of powers between the different branches of government. On the whole, they are right to be proud of such a remarkable document. Yet when, as is the case today with the Obama White House, the Republican-controlled House and the Democrat-controlled Senate, there is a profound ideological disagreement over something as fundamental as taxation, the US Constitution also provides the perfect instrument for ensuring national gridlock. With powers so perfectly balanced and sternly separated by those bewigged genius Framers of 1783, the American system can all too easily grind itself into a political and economic deadlock that could never have been their intention.
A supple, good-natured president with a genuinely bipartisan approach and a willingness to compromise can reach across the aisle and avoid having the government of America completely seize up under his administration. “Good ol’ boy” presidents such as LBJ and Bill Clinton managed it, as did the more rebarbative Richard Nixon. Both Bushes got by well enough, and although Ronald Reagan had some difficult moments — in 1985 Senator Warren Rudman described his own across-the-board budget cuts as “a bad idea whose time has come” — he never had to face the kind of sequester nightmare that Barack Obama has quite deliberately designed for himself.
For all that it might blight the second term of Obama’s presidency, the sequester — amounting to $85 billion in automatic spending cuts levelled equally across government agencies — was his own idea. The concept of a massive sequestering of federal funds regardless of merit was considered by the administration to be so unacceptable to politicians that it was passed into law in the Budget Control Act of July 2011 as a means of terrifying the Republicans into coming up with tax hikes in order to prevent it ever going into effect. The New York Post‘s typically forthright headline about Obama: “He Did It To Himself”, is completely accurate, therefore. Nor did Obama get the Republican leadership to agree to tax increases before instituting the sequester.
This did not prevent the administration getting unpleasantly aggressive when the veteran investigative journalist Bob Woodward revealed in the Washington Post that the president himself was “moving the goal posts” by demanding “a substitute for the sequester include not just spending cuts but also new [tax] revenue”. Gene Sperling, the chief economic adviser to the President, shouted at Woodward when the journalist phoned up to double-check his facts, and then sent an email saying: “I do truly think you should rethink your comment. I think you will regret staking out that claim.” The threat of denial of future White House access, the lifeblood of any journalist, was implicit in Sperling’s email, but he badly overreached himself trying to blackmail the man who broke the Watergate story and wrote All the President’s Men. Woodward simply published Sperling’s email on the Politico website, thereby drawing much more attention to the White House’s failed cover-up, for which Sperling then had to apologise on TV.
The administration has done all in its power to terrify ordinary Americans with its dystopian vision of what the automatic cuts will mean to them, even though the amount being cut only represents 2.5 per cent of the $3.533 trillion federal budget for the fiscal year 2013. Obama has stated that there would be fewer measles vaccinations, fewer federal meat inspectors, “airport security will see cutbacks” meaning longer queues and increased danger, and “federal prosecutors will have to close cases and let criminals go.”
His supporters go farther, claiming that disaster relief, Medicare and Medicaid, schools and scientific research will be hit “drastically”, that tens of thousands of government employees (especially for some reason firemen) will lose their jobs, that grants for 1.4 million students enrolled in higher education will shrink, and a further 680,000 students enrolled in federal Work-Study programmes will see their wages collapse. Job training programmes are supposedly at stake, “particularly for disadvantaged youth”.
With these blatant scare tactics, Obama aims to build up enough fury against the Republicans — whom he hopes will be blamed entirely for the sequester — that his party will win the House in the 2014 mid-term elections, after which power would not be separated but would reside completely with the Democrats. It is in Obama’s interests to ensure that the sequester impacts negatively on as many Americans as possible, which is why he has now twice refused Republican offers to switch it from across-the-board cuts to ones that the administration itself chooses. As the National Review columnist Jonah Goldberg has quipped: “If an agency has a billion-dollar budget and someone proposes cutting a dollar from its scheduled increase in funding, that dollar will be the one earmarked for the screw needed to keep a bridge from collapsing on a high school’s Thanksgiving parade.”
Yet pursuing this scorched-earth strategy involves political risks for Obama as well as for the Republicans he blames for the sequester, not least because many Americans can’t see why 2.5 per cent cuts need to be taken out of frontline services. Some 63 per cent of them approve a 5 per cent across-the-board cut in federal spending anyhow, according to the latest polls. Instead of fretting over where $85 billion might be lost, they wonder instead about the $45 billion that Senator Marco Rubio has identified as sitting in dormant federal accounts, or the $40 billion of the foreign aid budget, or the $77 billion Crop Insurance Programme, or the 55,000 unused or underused federal buildings which, if they were even just given away, would save $17 billion per annum in maintenance costs. Some people have even wondered about the $179,750 an hour it costs to fly the president in Air Force One to political rallies, at which he blames the Republicans for refusing to increase taxes.
Back in 2011, Obama assumed that the Republicans would not allow the sequester to go ahead because of its $55 billion projected cut in the defence budget — a staggering 8 per cent of total Pentagon spending. Yet Friday March 1 dawned and it went ahead nonetheless.
America is therefore slicing into a defence budget that has already been savagely cut by this administration, at precisely the same time that China has announced an annual increase of 10.7 per cent in its defence spending for 2013. Even the news that the sequester will mean that the United States will no longer have an aircraft carrier on both sides of the Straits of Hormuz — able to keep the waterway open regardless of Iranian provocations or even attack — has not persuaded the politicians in Washington to compromise.
Small wonder that key countries in East Asia are now viewing the US as a waning power and China as a rising one. Indeed, with much of the money that America is spending on its federal programmes being borrowed from China in any case, any other conclusion would be bizarre.
The thing that makes the sequester so absurd is that even with it going into full effect, the federal budget for 2013 will still be $15 billion higher than in 2012 (and 10 per cent higher than it was when George W. Bush was president). So the arguments between the House Speaker, the Republican John Boehner, and President Obama over where the sequester cuts should fall are taking place against a background of inexorably rising public spending anyhow. Yet still Obama is effectively arguing that without his 2.5 cents on the taxpayer’s dollar, there’ll be a measles epidemic among children, condemned meat sold on supermarket shelves, al-Qaeda bombs on aircraft and murderers freed to terrorise the streets. The White House press secretary Jay Carney hasn’t yet stated whether the sequester might also unleash plagues of locusts and scourges of scorpions, but it’s early days yet.
For all that, the Democratic-leaning media have successfully managed to paint Boehner as “Mr No”, a blinkered defender of the tax breaks and privileges of “billionaires and millionaires”. In fact, taxes have gone up drastically to pay for the 19 per cent increase in public spending under Obama, and all the Republicans are presently doing is attempting to prevent any more damage to the wealth of individual Americans.
In order to avoid the so-called fiscal cliff at the end of 2012, Boehner’s House Republicans agreed to no fewer than 13 tax increases which came into effect on January 1. The top marginal tax rate for incomes over $400,000 rose from 35 per cent to 39.6 per cent; the social security portion of the payroll tax rose from 4.2 per cent to 6.2 per cent; personal exemptions of adjusted gross income of over $300,000 were phased out; the tax rates on investment income rose from 15 per cent to 20 per cent; inheritance tax rose from 35 per cent to 40 per cent, and no fewer than six tax increases connected to Obamacare were instituted.
Although the White House is trying to portray Boehner as intransigent, he has merely been fighting a belated, desperate rearguard action, several of the biggest battles already having been lost. The true intransigence, as so often with this administration, comes from Obama himself, who has taken his (wafer-thin and smaller than 2008) election victory of 2012 as a mandate to bully the House Republicans, while offering only paltry reductions in the really big-ticket items on the national budget.
What the Wall Street Journal has nicknamed “Obamageddon” might well win him some seats in the 2014 mid-terms, especially if the cuts really start to hit frontline services and the American public overwhelmingly blames the Republicans for something that the president himself invented. Yet it is in the nature of American politics that ultimately the buck stops with whomever is in the Oval Office; it’s the sitting president who is credited or blamed for the state of the nation. Obama might therefore win each of these individual political battles, but if the sequester were to hurt ordinary Americans for long periods of time — quite apart from what the defence cuts will do to America’s national interest — in terms of the historical perception of his presidency, he will lose the war.