Sequester

Sequester kicks in on Friday, and like everyone else in the Washington DC area I will feel the impact.  It probably won’t hit home immediately even in this town, since government furloughs probably won’t start the instant the sequester is official.   But if sequester remains for a few weeks they will happen.  And all the other short term impacts will happen, too, over the ensuing several months, if nothing is done to reverse the event.  Given the political incentives on each side that seems possible now, even though it seemed unthinkable even a month or two ago. 

The blame for this is tangled.  The original suggestion for a set of automatic budget cuts so unpalatable that it would force the two sides of the great budget debate back to the table, to force the Republicans to accept some revenue increases and the Democrats to accept some entitlement changes, seems to have originated in the White House.  In the Washington Post this morning Bob Woodward informs us that Jack Lew and Rob Nabors, for the White House, first proposed the sequester to Harry Reid on July 27^th, 2011.  But they did that because they had no other viable options left.  The debt ceiling “crisis” of 2011 was an immediate threat.  The United States government would have been forced into default within a very short time if no resolution was found that would induce the House Republicans to vote for a debt ceiling increase.  All other proposals had been rejected by one side or the other.   And once this sequester was suggested the Republicans leaped on it with an eager glee, since it is all cuts and no revenue increases.  But Congressional Republicans are also to blame, because they manufactured the debt-ceiling crisis that this sequester diverted; they created it out of thin air, and have created one unnecessary crisis after another since the 2010 election swept the tea party into de facto power in Congress.  (Yes, de facto power: they hold enough power in the House to defeat even proposals from their own Republican leadership, and enough power in the Senate to derail any proposal that has less than 60 solid votes.)  Week after week, month after month, the Republicans in Congress bring this country to the brink of brutal self-mutilation in an effort to gain through threats what they can't achieve through votes.

So the idea came from the White House to divert a budgetary and economic threat that the Congressional Republicans created, and have created again in the months since then, and threaten to create again at the end of the current Continuing Resolution when the authority the Congress has granted to the government to spend money expires, and again shortly after that when a new debt ceiling is reached, meaning that the authority that Congress has granted to the Treasury to borrow money has expired.  Again, and again, and again, in an endless series.  Note that in each case the Congress can, on its own and without any negotiation with the White House, simply extend new authority for each of these fundamental functions of government.  They create crises by refusing to do so, and by creating crises they threaten us all.

But the issue now is not how we got here.  We are here.  So what will the consequences be?  And the answer to that is far more complicated and more interesting than deciding who to blame.  Because I suspect that the immediate impact on average lives will be less than the chatter has implied, at least the chatter in this town (I don’t know whether this is actually a topic of everyday conversation in the rest of the country.)   

Because much of what the government does takes time to show any result.  Much of what the government does is insurance or defense: no one’s life is immediately improved when the government invests in a fire truck, and until a fire breaks out that expense may seem like a waste of money.  Similarly, building a new ship for the Navy may seem like a waste of money until it’s needed to combat pirates off Somalia, or to provide what is called, in defense-speak, HADR (humanitarian assistance and disaster relief) after a Tsunami somewhere along the Pacific rim.  And some of what the government does is investment in progress.  It’s hard to pinpoint the exact time when a reduction in cancer research will be felt, or what event would could be blamed on it.  That kind of long-term investment in R&D is a slow process, producing results a decade or two away.  And a reduction in support for education won’t be felt for a decade either, except by those whose education is immediately disrupted.  That’s one of the reasons that government is called on to make investments like that: there is no immediate profit in them, so private markets, private investors with finite lives and time horizons measured in years, will systematically under-invest in them from the view of a nation, whose goals span many generations, and whose time horizons may be measured in decades or centuries.

There will be short term inconveniences if the sequester lasts more than a few weeks: FAA furloughs and reductions will make air travel a bit more of a hassle, government offices (ie, for unemployment applications, Social Security issues, and so on) will have longer lines, and so on.  There will be fairly quick reductions of support for education and public safety.  The Center for American Progress has released a report showing the immediate funding losses to the states, and it’s worth a read (download the full PDF, and look through it---it's only 16 pages including all the tables.)  And if the sequester lasts more than a few months the economic cost will be substantial: a renewed recession is a real possibility, and we have not yet come close to recovering from the last one.

But for the average person in an average day, going to the job he or she still has and going home, cooking dinner and watching TV, caring for children, there will be no immediate cataclysm they can point to and blame on sequester.  So I expect the usual jokes about how the government shut down and no one noticed.  But those jokes are ignorant, and dangerous.  The loss is real, and some of it can’t be quickly recovered.   Some can’t be recovered at all.