What Republicans Have to Lose in the Sequestration

Evan Soltas is a contributor to Bloomberg View.
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U.S. Republicans think they have nothing to lose from the sequestration. But nobody knows what the effects of the federal agencies' spending cuts will be. Will it be chaos? Or will it be bearable? Your guess is as good as mine.

Until we have the answer, Republicans do have something to lose: the credibility of their own argument for spending cuts.

The sequestration is designed to hurt. Federal agencies have little flexibility in how the cuts are administered. Only a few have made longer-term plans for how they'll manage. The result is a bunch of cuts that will create disproportionate disruption in the normal functions of government, and that can't plausibly be permanent.

Republicans hope to convince the public that the U.S. can make substantial cuts in federal spending. Showing them that the first incision leads to furloughs of air traffic controllers, for example, is precisely the wrong way to do it. What's worse, from the party's point of view, is that the cuts won't stick. Furloughs are not a real plan to reduce government spending.

Some Republicans began to see this a little too late. Senators Pat Toomey of Pennsylvania and Jim Inhofe of Oklahoma put forward legislation that would have given President Barack Obama discretion to allocate the cuts more intelligently. It failed in the Senate for three reasons.

First, time. The government can't find $85 billion worth of low-impact cuts in 24 hours.

Second, presidential discretion is limited. Even if Obama can avoid furloughs, he can't close government programs permanently. He can't reorganize agencies, a power that presidents had until it lapsed in 1984. And, of course, only Congress can touch federal social-insurance programs. A president just can't do that much without congressional approval.

Third, Toomey and Inhofe's suggestion ran into a severe problem of incentives. It wasn't in the president's interest to mitigate the effects of spending cuts he opposes and thinks will be repealed once they start to hurt.

Here's a better idea that solves all three issues: Replace the sequestration with new "back-loaded" spending caps so that the cuts start small, expand over the next decade and end up equal in value to the original legislation. Congress can give the president discretion to make the smaller cuts right now. It can work out the big ones later.

This deal preserves everything the GOP wants. All the spending cuts happen. Yet it would also appeal to Democrats and the White House in particular. They might be willing to put aside their demand for tax increases in return for back-loading the cuts. Back-loading the sequestration would be objectively better fiscal policy, and it would let executive discretion save money where it can.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Evan Soltas at esoltas@gmail.com