The Republican Sequestration Plan

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Photo: Alex Wong/2013 Getty Images

Whether or not you agree with it, and whether or not it will work, President Obama’s strategy on sequestration is perfectly obvious. His goal is to end the automatic budget cuts, which he regards as stupidly constructed and likely to harm the economy, and replace them with a long-term deficit reduction deal, balanced between cuts to retirement programs and closing off tax deductions. His plan to win involves isolating the unpopularity of both sequestration and the Republican Party’s goals (especially its refusal to raise taxes on the rich) in order to force the opposition to compromise.

The whole drama, then, lies with the Republicans. And deciphering the GOP strategy is as mysterious as gaming out the plans of a tiny band of warring clans in some mountainous region of Afghanistan. Nearly everything about them is almost completely inscrutable to outsiders. What is the party actually hoping to accomplish in the end? How do Republican leaders think they will arrive there?

Deepening the bafflement is that the Republicans’ apparent approach bears no relation either to political reality or to the party's stated goals. President Obama is offering up something — hundreds of billions of dollars in cuts to Social Security and Medicare — that Republicans say they want and which (because of their unpopularity) they have proven unable to obtain even when they have had full control of government. They are instead undertaking a public showdown against a figure who is vastly more popular and trusted, who possesses a better platform to communicate his message, and whose message itself — spread the pain among rich and middle class alike, don’t cut retirement programs more deeply than needed in order to protect tax loopholes for the rich — commands overwhelmingly higher public support.

I think the Republican Party’s behavior can be at least partly explained, though not necessarily rationalized. The main thing that’s going on is that, in the face of cross-pressures, the party’s anti-tax wing has once again asserted its supremacy. As has held true since 1990, when conservatives revolted against the (highly successful) deficit reduction deal negotiated between President Bush and congressional Republicans, every priority has given way to the cause of lower taxes on the highest-earning taxpayers. The party’s decision now is simply a replication of every decision it has made since then.

Part of the confusion is that Republicans have been saying for months that they really just want to stop tax rates from raising. They’re happy — nay, eager — to make the rich pay more taxes by reducing their tax deductions. Certain conservative economists believe this as well. Since Obama is offering to increase revenue in exactly this way, his plan might seem inoffensive to Republicans. Republican economist Martin Feldstein proposed a deduction cap that would raise four times as much revenue as Obama is asking! Ezra Klein can’t understand why Republicans won’t accept a deal to reduce the tax deductions they’ve been calling a pollution of the tax code, especially in return for entitlement cuts.

The answer to this piece of the mystery is clear enough: Republicans in Congress never actually wanted to raise revenue by tax reform. The temporary support for tax reform was just a hand-wavy way of deflecting Obama’s popular campaign plan to expire the Bush tax cuts for the rich. Conservative economists in academia may care about the distinction between marginal tax rates and effective tax rates. But Republicans in Congress just want rich people to pay less, period. I can state this rule confidently because there is literally not a single example since 1990 of any meaningful bloc of Republicans defying it.

What has aided the easy reversion to form, with low taxes for the rich dominating all other considerations, is the pent-up rage and betrayal John Boehner has engendered among his most conservative members. Almost nothing Boehner has done since taking over as speaker has endeared him to his ultras. Every subsequent compromise creates more embitterment, and the last few moves have provoked simmering rage. Conservatives had to swallow a tax hike, and then swallow an increase in the debt ceiling. Boehner has, incredibly, had to promise his members that he will not enter private negotiations with Obama.

The pressure for confrontation as a method has built up to the point where seemingly no deal Boehner could reach would leave him safe. The reason the parties have avoided negotiating is because they both know this. The Republican crazies have been denied the fight they crave, and Boehner has to give it to them, however unwise it may be.

The question, though, is what happens after that. Boehner’s Plan A is the one everybody in the party can agree to — Obama caves in and offers to replace sequestration with cuts to social spending, without any revenue increase. But Plan A won’t happen, because it’s worse for Obama than even permanent sequestration. Obama won’t fold, and sequestration will begin, its effects taking effect slowly.

The first test will be whether Boehner can continue to hold the allegiance of his defense hawks, who only accepted sequestration in the first place because Boehner promised them it would never happen. They have mostly held their tongues out of party loyalty, but the longer time goes on, the stronger will be their temptation to cut a side deal with Obama.

A second faction to peel off will be the party’s political realists — members from relatively vulnerable districts, party strategists, and others conscious of the GOP’s vulnerability to public opinion. For reasons noted above, the battle for public opinion is nearly hopeless, and Republicans will lose it just as they lost the fiscal cliff showdown, the 2010–2011 payroll tax showdown, and the Gingrich-era government shutdown showdowns. The pragmatists will give the ultras their shot to pull off the upset, but after some period of time — a week? a few weeks? — the brand damage will be undeniable and they, too, will sue for peace.

At this point, the question becomes what kind of peace they try to get. Do they try to replace sequestration by taking a version of Obama’s tax-deductions-for-entitlement-cuts offer? Or do they just try to get rid of sequestration and pretend to replace it, but come up with some kind of phony mechanism — future longer-term cuts, commissions, vague formulas — in an attempt to save the Pentagon budget without making the richies cough up any more taxes?

That eventuality is the hardest thing of all to forecast. The strangest thing about the party’s decision to fight rather than negotiate is that little sign can be found that any decision has actually been made at all, if you define a decision as a balancing of competing actual choices.

Republicans all agree that taxes are bad, defense spending cuts are bad, and some unspecified entitlement cuts would be good. The conservative media offer a window into the thinking of the Republican Party, and I follow it fairly closely. To read conservative pundits, Obama’s demand is higher taxes, full stop. Conservatives are not rejecting Obama’s offer. They are refusing to consider it at all. They will endorse Boehner’s impossible-to-attain goals, and they will denounce Obama’s imaginary all-tax alternative, and they will proclaim themselves ready to accept sequestration rather than submit to the socialist hell Obama would impose on them otherwise.

But consideration of the actual choice at hand — reduce tax deductions and cut Medicare and Social Security in a manner acceptable to Obama, versus seeing if Obama will cancel out sequestration with no replacement, versus accepting sequestration as permanent policy — is getting no hearing at all. I don’t know what Republicans will do, and I’m fairly sure they don’t either.