February 27, 2013

With Washington mired deep in the manufactured crisis known as sequestration, one option for resolving the crisis is getting almost no attention: Simply repealing the sequester.

That may now change. The AFL-CIO is coming out today for a repeal of the sequester. The labor federation will press the case in the days ahead that the sequester perpetuates destructive government-by-crisis, and that more austerity — replacing the sequester with other spending cuts — is exactly what the country doesn’t need at a time of mass unemployment and lackluster growth.

“We need to repeal the sequester,” Damon Silvers, the policy director of the AFL-CIO, told me in an interview this morning. “It’s bad economic policy, and it feeds a dynamic that encourages hostage taking. We are calling on elected officials not to play this game of substituting one bad thing for another bad thing. We’re insisting that our elected officials not buy into this inside Washington game of manufactured crises.”

This morning, the AFL-CIO’s executive council voted unanimously to call for repeal of the sequester, and I’m told the AFL-CIO planning to organize events designed to mobilize behind this goal in the days ahead.

There are arguments against repealing the sequester. Republicans and many Democrats would immediately reject the idea, and the move could give Republicans an easy talking point to argue that Democrats are not serious about cutting spending. It could lead Republicans to conclude Dems think their negotiating position is weak — leading Republicans to dig in on their cuts-only position even harder. And some Dems worry that turning off the sequester permanently with no further deficit reduction could result in an immediate credit downgrade.

Asked to respond to these arguments, Silvers dismissed the notion that it would give Republicans a good political argument. “The sequester is deeply unpopular, and it’s going to be even more unpopular when it happens,” he said. “It is our view that the position we’re calling for is a position of sound economics and political strength.”

Silvers also disputed the notion that it would lead to a downgrade. “The United States is able to borrow money almost for free right now,” he said. “I’m not at all convinced there would be a downgrade. Credit ratings are downgrading countries right now because of their austerity programs.”

Ultimately, though, the best argument against the sequester — and against replacing it even partly with more spending cuts — is an economic one, Silvers insisted.

“Deficit reduction must be done by closing tax loopholes on corporations and the top two percent — under no circumstances should there be any benefits cuts to social insurance programs,” Silvers said, adding that policy makers should be orienting their decisions “towards unemployment and growth.”

The White House position is also for replacing the squester through the closing of such loopholes, but it appears that entitlements benefits cuts — such as Chained CPI for Social Security — are a real possibility as part of any grand deficit reduction bargain the parties might reach. It could actually be helpful to the White House and Dems to have a left flank out there pushing harder for a focus on economic growth and unemployment — rather than on cutting spending — because it will signal the limits of what the Dem base is willing to accept.

And whatever the merits of repealing the sequester, it’s certainly healthy for the political conversation — which has been largely hijacked by deficit mania — to have labor out there demanding a wholesale refocusing on jobs and economic suffering.

Greg Sargent writes The Plum Line blog, a reported opinion blog with a liberal slant -- what you might call “opinionated reporting” from the left.
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