WASHINGTON — First the White House and Congress created a potential fiscal crisis, agreeing more than a year ago to once-unthinkable governmentwide spending cuts in 2013 unless the two parties agreed to alternative ways to reduce budget deficits.
Now that those cuts are imminent — because compromise is not — they have created one of Washington's odder blame games over just whose bad idea this was.
The battle lines over the cuts that are scheduled to begin Friday, known in budget parlance as sequestration, were evident Saturday in President Barack Obama's weekly address and the Republican response, delivered by Sen. John Hoeven of North Dakota.
“Unfortunately, it appears that Republicans in Congress have decided that instead of compromising, instead of asking anything of the wealthiest Americans, they would rather let these cuts fall squarely on the middle class,” said Obama, who has proposed a substitute mix of spending cuts and new revenues, achieved by repealing some tax breaks used by wealthy individuals and corporations.
He added: “Are Republicans in Congress really willing to let these cuts fall on our kids' schools and mental health care just to protect tax loopholes for corporate jet owners? Are they really willing to slash military health care and the Border Patrol just because they refuse to eliminate tax breaks for big oil companies?”
For Republicans, who oppose any tax increases, Hoeven countered: Obama “blames Congress for the sequester, but Bob Woodward, in his book, 'The Price of Politics,' sets the record straight. Woodward says it was President Obama who proposed — and promoted — the sequester.”
What makes this debate over blame so odd is that both sides' fingerprints — and votes — are all over the sequestration concept. The point of sequestration, in fact, was to define cuts that were so arbitrary and widespread that they would be unpalatable to both sides and force a deal.
That won Republicans' support for increasing the government's debt limit and thereby averted the nation's first default. The Republican-led House and Democratic-led Senate each passed the accord overwhelmingly, and the Democratic president gladly signed it.
The idea for sequestration did come from the Obama White House, as news accounts made clear at the time — Jacob Lew, then Obama's budget director and now his nominee for Treasury secretary, proposed it.
Lew, who was a senior adviser to the House speaker in the 1980s, lifted language from a 1985 law that he had helped negotiate, called the Gramm-Rudman law. That statute was conceived by two Republican senators to be “a sword of Damocles,” as they said at the time, one that hung over the two parties, poised to strike unless they compromised on deficit reduction.
In the summer of 2011, the two sides had already agreed to nearly $1 trillion in reductions over a decade in discretionary spending programs, which cover just about all government functions except the entitlement benefit programs like Medicare, Medicaid and Social Security.
But Obama and congressional Republicans could not agree on an additional an $1.2 trillion in deficit reductions. The president demanded that amount come from higher taxes on the wealthy and some reductions in entitlement spending. Republicans insisted on entitlement cuts only.
So both parties started negotiating for some kind of trigger, as they called it — an undesirable, automatic action that would slash deficits if Democrats and Republicans could not. Obama and congressional Democrats wanted a trigger mandating automatic spending cuts and tax increases; Republicans insisted on spending cuts only.
Democrats conceded, and that is when Lew — along with Gene Sperling, director of Obama's National Economic Council — proposed the Gramm-Rudman sequestration. Given that law's Republican parentage, the Obama advisers figured that such a trigger would appeal to Republicans, and it did.
Speaker John Boehner and three-quarters of House Republicans voted for the bipartisan agreement. To use Hoeven's word, both parties “promoted” their compromise, including sequestration. Boehner, R-Ohio, said he had gotten “98 percent” of what he wanted.
Their bipartisan thinking was this: With indiscriminate automatic cuts taken equally from domestic spending and from Pentagon accounts, Republicans would so badly want to avoid cutting military spending that they would accept some tax increases. And Democrats would be so eager to avoid cuts in domestic programs that they would drop their opposition to reducing future entitlement benefits in the Medicare, Medicaid and Social Security programs.
But it has not worked out that way. Republicans, having angered their conservative base in January by acquiescing in a tax law that raised income tax rates on high incomes, have refused to consider further tax increases. And many Republicans, especially those elected with Tea Party backing, want the sequestration cuts to take effect.
Over the past few days, Republicans have circulated a column by Woodward, published online Friday by the Washington Post, in which he wrote that Obama was “moving the goal posts” from what he had agreed to in the summer of 2011 by insisting that a sequestration substitute have tax increases as well as reductions in entitlement spending.
“What goal posts is Woodward referring to?” Jay Carney, the White House press secretary, wrote on Twitter late Friday. The White House “always wanted more revenue to avoid sequestration, not just cuts.”
Obama vowed from the day he announced the agreement 19 months ago that he would insist on “a balanced approach” that cut entitlement spending and raised revenues by overhauling tax exemptions. “Everything will be on the table,” he said.
Still, the 2011 agreement left unspecified how to achieve the additional $1.2 trillion in deficit reduction in 10 years. That fall, the so-called supercommittee — established by the law to negotiate the savings — considered revenue increases, including $300 billion in a GOP plan, $800 billion in Democrats' offer. With the supercommittee's failure, Obama and Congress had a year to seek the elusive “grand bargain” and avoid sequestration.