The Sequester

The column inches are beginning to pile up on the latest budget standoff. It's the sequester this time. It has been over four weeks since the Boehner-led House voted to raise the debt ceiling on January 23. So we've been spared for a month, allowing us to concentrate on other matters.

If you're just starting to dip back in a good place to start is today's lead unsigned editorial in the New York Times, "Why Taxes Have To Go Up." The answer? The lasting damage of the Bush tax cuts and an aging population:

Contrary to Mr. Boehner’s “spending problem” claim, much of the deficit in the next 10 years can be chalked up to chronic revenue shortfalls from the Bush-era tax cuts, which were only partly undone in the fiscal-cliff deal earlier this year. (Wars and a recession also contributed.) It stands to reason that a deficit caused partly by inadequate revenue must be corrected in part by new taxes. And the only way to raise taxes now without harming the recovery is to impose them on high-income filers, for whom a tax increase is unlikely to cut into spending. 

Raising taxes at the top is neither punitive nor gratuitous. It is a needed step, both to achieve near-term budget goals and to lay the foundation for a healthy budget in the future. As the economy strengthens and the population ages, more taxes will be needed from further down the income scale, both to meet foreseeable commitments, especially health care, as well as unforeseeable developments, from wars to technological challenges. But there will never be a consensus for more taxes from the middle class without imposing higher taxes on wealthy Americans, who have enjoyed low taxes for a long time.

In today's offering, "Sequester Of Fools," Krugman says that Congress should repeal the sequester:

The right policy would be to forget about the whole thing. America doesn’t face a deficit crisis, nor will it face such a crisis anytime soon. Meanwhile, we have a weak economy that is recovering far too slowly from the recession that began in 2007. And, as Janet Yellen, the vice chairwoman of the Federal Reserve, recently emphasized, one main reason for the sluggish recovery is that government spending has been far weaker in this business cycle than in the past. We should be spending more, not less, until we’re close to full employment; the sequester is exactly what the doctor didn’t order.

And he warns against the false equivalence being peddled in the media (for a fine example one can cast his glance to the left of the opinion page and read David Brooks' column, "The D.C. Dubstep"). Krugman says,

As always, many pundits want to portray the deadlock over the sequester as a situation in which both sides are at fault, and in which both should give ground. But there’s really no symmetry here. A middle-of-the-road solution would presumably involve a mix of spending cuts and tax increases; well, that’s what Democrats are proposing, while Republicans are adamant that it should be cuts only. And given that the proposed Republican cuts would be even worse than those set to happen under the sequester, it’s hard to see why Democrats should negotiate at all, as opposed to just letting the sequester happen.

This is a political problem the source of which is Republican intransigence. Why do we have this problem? To find the answer all one has to do is consult the reporting of the excellent Jonathan Weisman. In a story yesterday, "GOP Resisting Obama on Tax Increase," Weisman, as always, lets his readers know that Republicans don't feel they need to compromise because they are politically invulnerable due to gerrymandering:

But House Republicans say they are feeling invulnerable in the current clash. Not only can they point to last year’s bills to replace the cuts, but redistricting has made most of them immune to political threats and entreaties. For many representing conservative districts where the president holds little sway, an attack by Mr. Obama is a badge of honor, senior Republican House aides say.

This is the neo-Dixiecrat GOP, a rump party holed up in the House of Representatives with majority status for the foreseeable future thanks to a radical Supreme Court hellbent on shredding all campaign finance law.