Democrats should stop hyperventilating about the sequester if, as reported, they really want to shut down the government next month. Democrats have concluded, according to my colleague Greg Sargent, that after all the fussing, the sequester really isn’t going to be such a big deal. (“ ‘The sequester doesn’t have that immediate shock value,’ a senior Senate Democratic aide tells me. ‘It’s not the kind of thing where people wake up on March 1st and realize it happened. It doesn’t have the sort of acute impact that the fiscal cliff or debt ceiling did. We need a harder backstop to really force this fight.’ “) Oh, so never mind the president’s catastrophic cries. Even weirder — the “solution” after denouncing government services interruption is to shut down the government, something that Democrats have always accused Republicans of relishing.
This “strategy” — if you can call it that — is, as one Republican House leadership aide put it, “moronic.” If the Democrats announce now that they intend to force a government shutdown, then why bemoan minimal sequester cuts? And how credible will they seem in March, having announced in advance that they intended to shut down the government to get more tax increases?
A second House leadership adviser told me, “Rather than seek a second set of tax hikes and threatening a government shutdown, Democrats should identify some common-sense spending cuts and reforms and work with Republicans to fix the spending problem in Washington.” Republicans privately consider the Democratic gambit to be unserious. No deadline is going to push a tax hike through the House. Republicans are willing to look at tax reform that is pro-growth and lowers rates but consider the revenue debate “over.”
If the House and Senate can’t agree and the GOP offers another CR (the most likely outcome, frankly), it seems entirely improbable that the Dems will refuse and shut down the government. All of this shutdown talk then sounds rather half-baked, to be candid.
Democrats overplayed their hand in the sequester fight, predicting calamities that not even the New York Times said were likely. (If government workers ever received a pay cut, they might understand that in the real world, if you get a 10 percent pay cut, you can economize without, say, feeding your kids only 90 percent of the time.) Now having been forced to go along with the cuts the president stuck into the Budget Control Act, they intend to go for a budget outcome with more spending and tax hikes. And if not, they’ll show the GOP and shut down the government.
The Republicans haven’t gotten a gold star lately in PR, but confronted with this sort of incoherence they might just come out on top in the next round. But more important, how do the Dems think the markets and the economy more generally will react to a shutdown premised on the notion that Congress must keep spending and raise taxes? As Rep. Paul Ryan (R-Wis.) put it: “You know, unfortunately for, in California’s instance, or in the case of the Greeks, you can cook the books for only so long before the bond markets catch up with you, before they see what you’re doing and they know it’s not credible. And we can’t afford to keep trying to fool the bond markets into thinking that America has got real fiscal discipline when our leaders are not.”
Apparently, the Dems picked up the Republicans’ old tactic of forcing a showdown and threatening (figuratively) to blow up the economy and the government. If that is what they are really up to, the House should proceed along the lines Ryan has been describing:
We’re going to propose to undergo fundamental tax reform. We’re going to show the country exactly how we think the military ought to be funded and at what levels. We’re going to put all the details out there to show here’s how you cut spending, here’s how you grow the economy, here’s how you reform programs like Medicare and Medicaid and get rid of and replace Obamacare, and here is how you balance the budget and pay off the debt. That’s exactly the kind of budget we’re going to put out there.
Ryan will have the advantage of a baseline that takes into account the Obama tax hike and the sequester cuts, so this is doable. If he and the House Republicans pass a credible budget and the Dems insist they would rather shut down the government, then Republicans believe they will be sitting pretty for 2014.