Friday, March 08, 2013

What's Next in the Budget Wars? Continued Cruelty, and the Return of the Trilemma

-- Posted by Neil H. Buchanan

The spending cuts related to "the sequester" have now started to take effect.  Naturally, the political spin wars go on, with some partisan hacks saying that the cuts are no big deal (conveniently ignoring the actual human beings who are already being harmed by the cuts, with many more soon to join in the pain), in an attempt to make it appear that President Obama tried to scare people about nothing.  There is no way to predict how the politics will work out, but for Democrats to lose on this one requires that they fail to make it clear that the cuts are not just numbers on a spreadsheet, that is, that they fail to seize this opportunity to show that "spending cuts" that sound so good in the abstract can be quite devastating in real life.  To his credit, President Obama has been trying very hard to make that case.  May he and his party keep it up.

Rep. John Conyers has introduced a bill to cancel the cuts, the Cancel the Sequester Act of 2013 (HR 900), the entirety of which reads: "Section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985 is repealed."  (Forget the 1985 part.  This is really about repealing the relevant parts of the 2011 Budget Control Act, which Obama negotiated with the Republicans two Augusts ago.)  For any readers who are interested, there is a petition in favor of the Conyers bill, being run by Social Security Works through the SignOn.org website, available here.

Given that Democrats do not want spending cuts, and Republicans do not want tax increases -- and given that the weak economy provides the opportunity to borrow at near-zero real interest rates -- one might be tempted to think that this repeal would have had a chance.  Certainly, it would give Republicans the opportunity to deny Obama his "balanced approach" of canceling the spending cuts but offsetting the cuts with progressive tax increases.  Even so, no one is holding their breath that the sequester will be ended.

As it happens, the new Buchanan/Dorf article on Columbia Law Review's Sidebar was published earlier this week (available here in html, and here in pdf format).  [As an important aside, I think it is important to point out that the outgoing third-year student editors at CLR went above and beyond the call of duty to get the article in e-print in record time.  (Our article was not a quickie blog-length comment, but an article that ended up being about half the length of a full article in a printed law review.)  I also want to highlight the footnote designated **, which includes our thanks to our research assistants, Angela N. Buckner and Robert F. Lehman at GW, and Sergio Rudin at Cornell.  Without being treacly, I do think it is appropriate to note just how important a role our students play in moving our work forward.]

Our article hits the newsstands, as it were, as the policy debate in Washington is moving past the sequester.  Everyone is now thinking about the next deadline, on March 27, when the continuing resolution under which the federal government has been operating must be renewed, to prevent a government shutdown.  Where does our analysis fit in?  Only two weeks ago, Professor Dorf and I briefly wondered whether our latest effort would be made moot, because Congress and the President could have responded to the threat of the sequester -- and the prospect of an endless series of budget-related standoffs -- by passing a new continuing resolution that canceled or modified the sequester cuts, and that increased the debt ceiling by an amount sufficient to accommodate the required borrowing under the new spending and taxing laws.

And then we laughed.  If ever there was a safe bet, it was that this Congress would fail to act on anything that was not an absolutely immediate need.  They barely acted in time to extend most of the Bush/Obama tax cuts two months ago, and it turned out that they did not act on the sequester-related cuts at all.  With a full 26 days between the sequester deadline and the continuing resolution deadline, and then almost two more months until the debt ceiling comes back into effect (followed by several more months of "extraordinary measures"), the idea that this would all go away is impossible to take seriously.  For the good of the country, we would like our articles to have become moot (in the best case, by having Congress repeal the debt ceiling).  But there was no way that this was going to happen.

One surprise is that the immediate post-sequester conversation has been rather low-key, and even conciliatory.  Early talk has it that there will be no brinksmanship on March 26, mostly because that is during a scheduled congressional recess.  Even if there is no screaming and posturing, however, what we will get is simply more of the same awful nonsense: The current spending and taxing laws will simply be extended through the end of the fiscal year (September 30), with the sequester-related cuts locked in.

Apparently, the plan is for House Republicans to try to undo some of the arbitrariness of the defense spending cuts under the sequester, and perhaps for Democrats to try to do the same for domestic cuts, but the cuts themselves are now a done deal.  So much for any hope that they might do something that would actually help the economy.

There is, no doubt, still plenty of opportunity for this all to fall apart.  Even so, Republicans seem to be aiming toward an even more insane longer-term strategy, to be announced soon by their supposedly deep-thinking budget guy, to balance the federal budget over a ten-year span.  As bad as that would be, it would at least sidestep the constitutional crisis-in-waiting that is the debt ceiling.  But wait!  As a recent New York Times editorial points out, the Republicans have not "promised not to abuse the next debt-ceiling increase, necessary in the next few months, to get further cuts."

So, according to the current plans, we will soon see everyone sign onto a needlessly cruel austerity budget, in anticipation of an even more gratuitously disastrous longer-term budget (with fights over the amount of austerity, not the question of austerity itself), and they will do so while creating a trilemma that will threaten default sometime later this summer.  Meanwhile, people will lose their houses, children will go without food, and our education system will continue to wither.  This is not funny.

5 comments:

The Dismal Political Economist said...

Everyone needs to understand the position of the Republicans within context.

The Sequester works for them because they value cutting government spending above all else. The negative impact on the people's lives and the economy is just an added bonus, because it provides them with the basis for blaming the President for the results of policy they have forced on the nation.

This is the reason why they will not budge, except to possibly restore some defense spending in a stealthy, under the table manner.

egarber said...

Just finished the latest article. Very thought-provoking as always.

You guys write:

“The President’s duty will be to choose the least unconstitutional option, and here that means
borrowing in excess of the debt ceiling, in exactly the way that Congress’s
spending and taxing laws require.”

I keep wanting to say something like this:

“…But why does the president have to do anything? If spending reaches the debt limit, everything will just resolve itself, because current spending accounts will simply run out on their own…”

But my logic only works if those current accounts are frozen in some way when we reach the limit. In reality, the government will still bring in tax revenue, falling short of what Congress is truly requiring. So how does the president decide where to sprinkle those incoming funds? That question is the flip side of what you guys talk about, in that deciding how to allocate fewer funds is tantamount to choosing how to cut spending (triggering non-delegation problems).

So in the end, I can’t find a way out of your logic (not that I was expecting to). But I’m still bothered by the notion that the president has to do something unconstitutional, where the choice essentially becomes one of constitutional damage control. My ultimate conclusion: Congress is really f*cked up. :)

Is there any path for this issue to enter the courts? How would standing work?

Neil H. Buchanan said...

TDPE's comment is well-taken, and fully consistent with my views on the matter. egarber's question is a good one, but there really is no possibility for the President to do nothing. If he does not spend the amounts that Congress appropriated, then he is doing something unconstitutional. This is an act/omission distinction, of course, and the point is that "sprinkling those incoming funds" is an aggressive act of power that involves a much greater amount of Presidential legislating than would borrowing enough money to carry out Congress's orders re spending and taxing.

Cristiero Rola said...

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Paul.K said...

With a full 26 days between the sequester deadline and the continuing resolution deadline, and then almost two more months until the debt ceiling comes back into effect (followed by several more months of "extraordinary measures"), the idea that this would all go away is impossible to take seriously. For the good of the country, we would like our articles to have become moot (in the best case, by having Congress repeal the debt ceiling). Cheap Runescape Gold | WOW Gold Kaufen