Wonkbook: Can sequestration be stopped?

February 6, 2013

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Wonkbook's Number of the Day: 11. That is the percentage by which Goldman Sachs forecasts real federal consumption and gross investment will fall over the next two years, due to the sequester and other spending reductions.


(AP Photo/Richard Drew)

Wonkblog's Graph of the Day: The CBO's new budget outlook, in 6 charts.

Wonkbook's Top 5 Stories: 1) The sequester's cuts are big, but are they unstoppable?; 2) new CBO report out; 3) centrism winning on immigration policy; 4) Cantor's Republican vision; and 5) a stealthy way the NRA blocks gun control.

1) Top story: Can sequestration be stopped?

Obama pushes to delay sequester again. "President Obama on Tuesday called on Congress to pass a small package of spending cuts and tax changes to delay the start next month of deep reductions in domestic and defense spending that could deliver a fresh blow to a fragile economic recovery. With time running out, Obama said, Congress should adopt measures to postpone the automatic spending reductions, known as the sequester, for a few months." Zachary A. Goldfarb in The Washington Post.

Government spending set to tumble, says Goldman Sachs. "'Sequestration, spending caps, and reduced war spending will together reduce real federal consumption and gross investment by 11% over the next two years.'" Ezra Klein in The Washington Post.

@MichaelSLinden: The president is making an announcement re: sequester 15 mins after CBO releases its budget outlook. Not cool, Mr. President. #sadwonk

How the sequester became politically inevitable. "What does the sequester’s move from close-to-unimaginable to close-to-unavoidable prove? That most basic rule of Washington: The politically easiest path is the one politicians prefer to take...[T]he sequester allows politicians to do what comes naturally to them: Blame the other guy for the problem and keep their hands clean(ish). Which is why it still very well may happen." Chris Cillizza in The Washington Post.

The Republicans seem ready to accept a smaller Defense budget. "In the modern history of the Republican Party, it would have been unthinkable. The GOP is built on two core tenets — small government and big defense spending — and for decades, the two ideas co-existed peacefully. Republicans wanted to cut the federal budget — everywhere except the Pentagon. No more." Darren Samuelsohn in Politico.

@mattyglesias: If the sequester takes effect the military may be unable to provide color guards at major sports events.

...But some in the GOP are wondering if the sequester is worth it. "At least one House Republican is beginning to wonder whether the sequester is worth it. Rep. Tom Rooney, a Florida Republican, Army veteran and member of the Intelligence Committee, is singing a different tune than most of his fellow Republicans who now accept the sequester: raise taxes." Jake Sherman in Politico.

@PaulPage: Rep. Camp tells CNBC to avert #sequester need spending cuts & 'combine that with comprehensive tax reform' that wld be revenue neutral.

Who's responsible for the sequester? "So just who is responsible for the looming and drastic automatic spending cuts known as the 'sequester'? It depends on what the definition of the word 'responsible' means. Republicans have made a concerted effort this week to argue that the sequester belongs to President Obama...[A]ccording to our Washington Post colleague Bob Woodward, the idea did in fact originate in the White House...But even if we assume that the idea did originate in the White House, we need to remember one more thing: The debt ceiling agreement that contained the sequestration cuts got significantly more Republican support than Democratic support." Aaron Blake in The Washington Post.

Music recommendations interlude: Fleetwood Mac, "My Heart Beat Like a Hammer," 1968.

Top op-eds

ORSZAG: Congress is getting in the way of a better budget picture. "The best path forward is a comprehensive fiscal deal combining upfront stimulus with delayed but credible austerity. To Republicans who deny the benefits of the stimulus side: How else would you bring the unemployment rate below 7 percent by the end of this year? And to Democrats who don’t want any entitlement reform: What makes you think no changes will ever be needed? And, in any case, why risk immediate austerity, which may be forced upon you by avoiding delayed austerity?" Peter Orszag in Bloomberg.

ZOELLICK: A new international economic strategy for the U.S. "The services trade, for example, is vital for boosting innovation, productivity and jobs in developing and developed countries alike—but regulatory, licensing, zoning and other barriers to services are often equivalent to a 30% tariff or higher... The U.S. should foster the WTO principle of world-wide liberalization by adopting standards in various industries and sectors that would be open to all economies that reciprocate." Robert B. Zoellick in The Wall Street Journal.

ADMATI AND HELLWIG: Do we need to wait for another financial crisis to get a real fix? "Bankers don’t have proper incentives on their own to make their banks safe. Current public policy and regulation give them strong incentives to borrow too much and to take excessive risks with their investments, both of which are in direct conflict with the public interest in a stable financial system." Anat Admati and Martin Hellwig in Bloomberg.

FLEMING: No need to make voting easier. "I have to laugh when I hear current-day Democrats not only lobbying against voter-identification laws but campaigning to make voting even easier than it already is. More laughable is the idea of dressing up the matter as a civil-rights issue." Thomas Fleming in The Wall Street Journal.

MILBANK: Eric Cantor's vacuous talk. "[T]he sunny routine was a difficult one for Cantor, who has made a career in Washington of being testy and acidic. His delivery was forced and, as he read his text, he seemed to be reminding himself to grin...In recent weeks, Republican leaders such as Cantor have resembled nothing so much as laundry detergent salesmen, figuring if they can simply rebrand their product (High Efficiency 2x Ultra Stainlifter Clean Breeze Concentrated Fresh!) Americans will buy what they’re selling. Omitted from consideration is the possibility that consumers don’t like what’s in the bottle." Dana Milbank in The Washington Post.

CROOK: How much technocracy? "The LSE commission’s proposal -- put more control of infrastructure in the hands of nonpolitical technocrats, subject to parliamentary oversight and strategic guidance -- is an approach that might make even more sense in the U.S. than it would in Britain. Why? Because public policy in the U.S. is far more politicized than in the U.K...A coherent strategy on infrastructure, an unavoidably long-term undertaking, is difficult to form. This may be the biggest threat to the country’s success over time." Clive Crook in Bloomberg.

Ninja interlude: What you didn't know about them -- like a ninja, you'll never see these ninja facts coming.

2) CBO releases latest budget outlook

The latest CBO report is out. "[T]he nonpartisan Congressional Budget Office rolled out new projections showing that the spending battles of the past two years have helped shrink record budget deficits but have also hampered economic growth...The deficit — the annual gap between taxes and spending — is projected to fall to $845 billion this year, the first time it has come in under $1 trillion since 2008." Lori Montgomery and Zachary A. Goldfarb in The Washington Post.

Read: The CBO report.

Explainer: The CBO's new budget outlook, in 6 charts. Brad Plumer in The Washington Post.

What the CBO has to say about the federal debt. "CBO projects that if Congress leaves current laws unchanged, the debt will be 77% of GDP by the end of the decade, and it will be higher if across-the-board spending cuts are diluted or various expiring tax breaks extended." Damian Paletta in The Wall Street Journal.

...And about healthcare and health insurance. "The CBO always expected that some Americans would lose their employer-health insurance under the Affordable Care Act, as some companies may direct their workers to the publicly-subsidized options available on the exchange. In this report though, they significantly increase that number, from 4 to 7 million." Sarah Kliff in The Washington Post.

Wonkblog's interlude: Making the team 'snuggly.'

3) Everyone is running to the center on immigration

Obama holds fast on deportation rules. "Immigration advocates asked President Obama on Tuesday to reconsider his administration’s deportation policies that have resulted in a record number of undocumented migrants being removed from the United States, but the president declined to make adjustments as he ramps up his public push for overhauling immigration laws, the advocates said." David Nakamura in The Washington Post.

...And he wants a deal on a guest-worker program. "The Obama administration is trying to broker a deal between business and labor leaders over a controversial guest-worker program for foreigners, resolving a long-standing sticking point that has created political peril for President Obama in the past." David Nakamura in The Washington Post.

GOP okay with residency, but not citizenship. "House Republicans on Tuesday staked out what they cast as a middle-ground option in the debate over immigration, pushing an approach that could include legal residency but not a path to citizenship — as their Democratic counterparts favor — for the 11 million illegal immigrants already in the country. Republicans also signaled that they are open to the idea of breaking immigration legislation into several smaller bills." Ashley Parker in The New York Times.

...That's because they're looking for the middle ground on immigration. "[The hearing] was a largely muted discussion of what has traditionally been one of politics’ most emotional issues, a sign of a desire by Republican leaders to find some way to address the immigration issue amid fears that the party has alienated a growing number of Hispanic voters with its hard-line stance." Rosalind S. Helderman in The Washington Post.

How immigration affects the budget. "If reform is mainly about granting citizenship to 11 million mostly poor illegal immigrants with relatively little education, it is going to land squarely in the cross hairs of our epic battle about taxes, entitlements and the role of government in society...It’s hard to say with precision what impact offering citizenship would have on the budget, but the chances are good that it would cost the government money. Half to three-quarters of illegal immigrants pay taxes, according to studies reviewed in a 2007 report by the Congressional Budget Office. And they are relatively inexpensive, compared with Americans of similar incomes." Eduardo Porter in The New York Times.

Are immigrants taking your job? "There are a lot of competing studies (and pundits) out there, but the general takeaway from conservative and liberal economists is that immigration is good for Americans’ living standards over the long run...As scholars at the Brookings Institution’s Hamilton Project explained recently, immigrants and native-born workers are generally complements, rather than perfect substitutes: lower-skilled immigrants largely sort into farming and other manual, low-paid jobs that the native-born don’t want to do, and higher-skilled immigrants provide labor that high-tech companies cannot find enough trained American-born workers." Catherine Rampell in The New York Times.

Ornithology interlude: The Birds-of-Paradise Project.

4) What Eric Cantor wants for the GOP

Cantor draws a road map of Republicans. "House Majority Leader Eric Cantor sought to further rebrand the Republican party on Tuesday, pivoting from budget issues to kitchen table issues like education, health care and immigration in an address to a conservative group. In a 30-minute speech called 'Make Life Work,' Cantor (R-Va.) broadly outlined the goals for his party." Nia-Malika Henderson in The Washington Post.

Read: The full transcript of Eric Cantor's speech.

Explainer: Eric Cantor wants to 'make your life work.' Here's how. Ezra Klein in The Washington Post.

The intended audience? Middle-class working families. "House Majority Leader Eric Cantor (R-Va.) aimed to repackage conservative principles through a familial lens in a domestic policy speech Tuesday, hoping to market GOP ideas to the average American parents who want a better future for their children." Kevin Cirilli in Politico.

Cantor: Talk about anything else besides the budget. "Many of the policies Mr. Cantor embraced — school choice, streamlining federal worker training and changing labor laws to allow workers to eschew overtime for time off — have been Republican agenda items for more than a decade. But they have largely dropped off the radar screen for a singular focus on deficit reduction." Jonathan Weisman in The New York Times.

And both parties are taking some time to think. "Things are a bit quieter on the Senate side of the U.S. Capitol this week, as Senate Democrats are decamping Tuesday and most of Wednesday to nearby Annapolis for a policy retreat, while Senate Republicans head over to the Library of Congress for their issues conference." Ed O'Keefe in The Washington Post.

Gustatory interlude: Grandmas and the way they make their favorite dish.

5) An NRA tactic you've never heard of

How the NRA is using 'pre-emption laws' to dismantle local gun-control rules. "The National Rifle Association began lobbying statehouses decades ago to adopt so-called pre-emption laws that limit the ability of cities and counties to regulate firearms. In 1979, seven states had laws that either fully or partially blocked municipalities from regulating guns; that number had reached 45 states by 2005." Joe Palazzolo, Ashby Jones, and Patrick O'Connor in The Wall Street Journal.

Republicans are opening up to some gun control. "The second-ranking House Republican said Tuesday that he supports improving the federal background-check system for gun buyers but stopped short of endorsing universal checks on all weapon purchases...[T]wo GOP lawmakers from suburban districts announced plans to co-sponsor legislation to make gun trafficking a federal crime for the first time. The moves signal potential openings for bipartisan compromise on gun control, a debate so far dominated by Democrats with little said or done by Republicans." Ed O'Keefe and Philip Rucker in The Washington Post.

Can we crack down on gun trafficking? "Gun experts say the bill could potentially help cut into the secondary firearms trade, though only if it’s part of a broader anti-trafficking strategy...[S]tates that have their own separate licensing and oversight systems for gun dealers tend to see less trafficking." Brad Plumer in The Washington Post.

Video interlude: Time-lapse through the mountains.

Wonkblog Roundup

Interview: Rep. Henry Waxman on climate change. Brad Plumer.

Patients' share of health spending is falling. Sarah Kliff.

The case for the too-big-to-fail banks. Neil Irwin.

Americans now spending more on gas than any time since early '80s. Brad Plumer.

Can policy restrict gun trafficking? Brad Plumer.

Eric Cantor wants to make your life work. Ezra Klein.

How the CBO has changed its healthcare forecasts. Sarah Kliff.

The CBO's new budget outlook. Brad Plumer.

Sharp cuts to federal expenditure loom. Ezra Klein.

Most Americans left out of Medicaid expansion. Sarah Kliff.

Et Cetera

5 things to know about the FCC's proposal for public WiFi. Cecilia Kang in The Washington Post.

White House moves towards emissions rules on existing power plants. Peter Nicholas and Keith Johnson in The Wall Street Journal.

States offer to pitch in to cover federal infrastructure spending shortfall. Kris Maher in The Wall Street Journal.

Flaws in election system are widespread, Pew study finds. Adam Liptak in The New York Times.

Got tips, additions, or comments? E-mail me.

Wonkbook is produced with help from Michelle Williams.

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