Obama’s New Leverage: Implement The Defense Sequester

There is much bemoaning in Blue Blogistan that by agreeing to the fiscal cliff deal, President Obama relinquished his leverage of the sunsetting Bush tax cuts.  (Markos says that the higher tax rates are the President’s “ONLY leverage.”).  Even those who aren’t angry think that somehow he has little leverage left.  I don’t think that that’s right.

Consider the defense sequester, which Very Serious People inside the Beltway believe to be some sort of problem.  I see no basis for this belief.

If the defense sequester is implemented, then defense budget will be — what it was in FY 2007, when we still had hundreds of thousands of troops in Iraq.  Keep that in mind the next time you read about how the sequester will give us a “hollow force.”  Did we have a hollow force during the Dubya Regency?

Micah Zenko of the Council on Foreign Relations has made the point succinctly:

The Bipartisan Policy Center projected that defense sequestration, if triggered, would lower the Pentagon’s budget (excluding war costs) for fiscal year 2013 to $498 billion. As then-Secretary of Defense Robert Gates quipped in July 2009: “If the Department of Defense can’t figure out a way to defend the United States on half a trillion dollars a year, then our problems are much bigger than anything that can be cured by buying a few more ships and planes.”

Conservatives often make similar arguments about domestic spending: “we are just going back to what we were spending five years ago!”  Progressives reject this, and I think rightfully, because our population is greater, and economic conditions are different (e.g. spending the same on Food Stamps during a recession and during an expansion makes no sense under Economics 101).  Would the same principle apply to defense spending?  Hardly.  There is noting about cyclical conditions that makes spending money on a bloated military establishment equivalent to spending on counter-cyclical policies such as Food Stamps and unemployment benefits.  Just as importantly, the terms of the defense sequester specifically allow the President to exempt salaries and benefits for military personnel, and President Obama has already ordered this exemption.  If advocates of ending the sequester believe that it is the best way to maintain counter-cyclical policies, then they must do things that thus far they have refused to do: 1) show why defense spending represent good counter-cyclical policy; and 2) give up the right-wing Republican nonsense that we should reduce spending in the first place.

Many of the most detailed arguments in favor of the defense sequester come from the Center for Strategic and Budgetary Assessments, a think tank that I admit I had not heard of before: its crucial backgrounder on the defense sequester can be found here.  Is it a real operation, or a fake think tank like the Tennessee Center for Policy Research, a Koch-funded libertarian whack job outfit that became briefly famous for “finding” that Al Gore’s home in Tennessee was an energy guzzler (a claim that has yet to be confirmed)?  CSBA looks to be the real deal, or at least hardly a left-wing front: it’s board members include David McCurdy, Pete Dupont, and James Woolsey.  Whatever else one might say about it, its people aren’t hanging out with Wavy Gravy.

The sequester method is hardly the best one to effect long-term, measured reductions in the defense establishment.  But we should not make the perfect the enemy of the good. Defense Secretary Panetta has been egregiously irresponsible with his Chicken Little warnings about what will happen if the sequester is implemented.  A new Defense Secretary cannot come too quickly.

President Obama needs to use the leverage that the defense sequester gives him.  The Republicans want to get rid of the defense sequester — badly.  By now, we should all be past the silly notion that the GOP wants to reduce spending: it only wants to reduce spending that could possibly assist low-income and working Americans.  Very well, the President has to say: I will veto any bill that gets rid of the defense sequester unless I get my own priorities in spending and revenue.  End of story. 

And conversely, if the President does not use this leverage, and instead agrees to benefit cuts in Medicare, Medicaid, Social Security, and crucial domestic priorities, he will have no one to blame but himself.

Comments

  1. dave schutz says

    I’m baffled: you say ” defense sequester, which Very Serious People inside the Beltway believe to be some sort of problem. I see no basis for this belief.” and you go on to say the defense sequester should be on problem for the nation. So, why do you think it provides such leverage for Obama to use against the Dems? Seems like the civilian side sequesters would provide more leverage for the Reeps. Am I missing something?

    • says

      Because the GOP desperately wants to get rid of the Defense sequester. Paul Ryan referred to it as “devastating” and Mitt Romney said that we should be spending MORE on Defense than we would even without the sequester. Huge defense budgets are part of Republican Party ideology as well as being layoffs to important GOP constituencies. Yes, I said it has little to do with good policy, but that is pretty much a sine qua non for anything the GOP does nowadays.

      • Mitch Guthman says

        I see two problems with what you say:

        First, in order for Obama to have leverage it must be the case that the Republicans fear the defense cuts significantly more than either Obama or the Democrats and I see no evidence for that. A number of Republican congressmen have said that they are opposed to the cuts and that the will harm the country but, even so, they will not relent in their demands for cuts to social spending. I haven’t heard any Democrats saying that they want the defense cuts or that if there are cuts to social spending they will block a deal.

        Without Republican desperation and Democratic resolve, I don’t see Obama as having any leverage. Besides, he had much greater leverage in the first part of the fiscal cliff negotiations but chose basically to give forgo most of what Democrats wanted and to concede some important things that Republicans wanted. In their time of greatest weakness, Republicans gained much of what they wanted and gave up very little (and they especially didn’t agree to forgo taking new hostages during the debt ceiling negotiations).

        Furthermore, in order to use this leverage, Obama would have to threaten huge defense cuts, something, which he’s previously refused to do—indeed, his own secretary of defense was recently up on the Hill testifying against further defense cuts. Obama himself has strongly resisted calls for major cuts in defense beyond the cuts already in his budget. Do you really see him playing out this hand and making massive defense cuts in retaliation for Republican intransigence?

        Second, a closely related point is that even if Obama has some kind of leverage because you think Republicans fear defense cuts more than he does, what makes you think that he’ll use it this time? Remember, he was in an extraordinarily powerful bargaining position in the just concluded negotiations. Any harmful consequences for going over the cliff were minimal, not immediate and easily remediable.

        He publicly committed himself to strong bargaining positions that he and his camp declared to be inviolate. He made tough sounding speeches. Yet, in the end, it was he who continually negotiated against himself; sweetened his offers and made concessions in return for nothing and then couldn’t bring himself to walk away from the table without a deal even though by walking away he would gain most of his asks and greatly increase his already powerful position of advantage (and consequently he made a poor bargain).

        By contrast, the consequences for a default on the federal debt are immediate and horrific. The Republicans seem willing to go right to the edge and maybe run right over it without regard to the consequences. They neither fear nor respect Obama. And why should they? He enjoyed a position of maximum advantage but ultimately extracted no real price from them. Again, having failed to take advantage of his unprecedented leverage in the last round of negotiations, why do you believe he will find the nerve to go toe to toe with the GOP without throwing in the towel? More importantly, why should the GOP take Obama seriously this time?

        There is also another possible disaster lurking. As I’ve mentioned before, I see no reason why the GOP or anybody else should believe Obama when he says that this time will be different and, unlike so many other times, he won’t back down. But let’s say that both things are true: The GOP is absolutely positive he will back down but, in fact, this time it really is different. Obama is resolute and will shut down the government and/or accept a default if the GOP continues to demand concessions in return for raising the debt limit.

        If Obama is truly and irrevocably committed but the GOP refuses to take him seriously (based on his past performance as a negotiator) then disaster is unavoidable. The Republicans have every reason to be absolutely confident that Obama will turn chicken so they won’t swerve to avoid the crash. So, if Obama really doesn’t turn chicken this time, a very nasty head on crash is perhaps inevitable.

  2. Brett Bellmore says

    Yes, please, implement it. Seriously, we’re spending too much on our military and foreign wars.

      • Brett Bellmore says

        A long standing position of mine; IMO, we’re suffering from a serious case of imperial over-reach. Insisting on being the world’s ‘super-power’ is destroying everything distinctively good about the US. I’d rather we were just another country, so that we could become again the world’s best “just another country”.

        You shouldn’t mistake my thinking a lot of the liberal arguments against Bush’s wars were BS, (As demonstrated by how little you hear of them now that they’re Obama’s wars.) with thinking they should have been waged. Really, the only argument needed against them is that they were elective, and like elective surgery, elective wars are generally a bad idea.

        • Student says

          I was never all that mad at Bush about the wars. I probably would have done something really expensive in Afghanistan myself, although I don’t know that I ever would have tried to occupy the place for more than a month. Iraq seems to have been pretty voluntary, but who knows, in the end it may have been worth it. I don’t have a crystal ball. I always expected Obama to continue with the drone strikes and generally continue to prosecute the plan we have been operating under since 9/11. I do know what you mean though; I remember recently trying to persuade my father to invest in Halliburton only to have him respond “but son, they kill people!” For several days I just assumed he meant that he believed the claim advanced by BP that the Macando blowout was caused by negligent concrete work by Halliburton and that documents proving as much were destroyed by HAL. If BP’s claims were correct, one could I suppose say that HAL (negligently) killed the engineers and workers who died in the fire. Only later did I figure out that my father was confusing HAL with Blackwater… man was that hilarious. He is a high information voter too; but a lot of liberals formed a definite blind spot in their seething rage and President Bush and Vice President Cheney, and for my father the HAL name got caught up in that rage. I am not at all a fan of his presidency and think he was basically an embarrassment to us, but I do see what you mean.

        • says

          You shouldn’t mistake my thinking a lot of the liberal arguments against Bush’s wars were BS, (As demonstrated by how little you hear of them now that they’re Obama’s wars.) with thinking they should have been waged

          Well, just to keep this in perspective, a lot of arguments for and against everything are BS. Liberals said tons of stupid things against the Iraq and Afghanistan wars, and conservatives said tons of stupid things in support of them. Overall, liberals were mostly for going into Afghanistan and mostly against going into Iraq, whereas conservatives were mostly for both. Liberals were right in both cases, Conservatives were wrong about Iraq. That 50/50 record is worse than it looks, though, because it was rather obvious that we should go into Afghanistan and rather obvious that we shouldn’t have gone into Iraq.

          In general and as usual of late, liberals were more right than conservatives. Their bad arguments were more confined to the fringes, whereas the bad conservative arguments thoroughly infected the core of conservatism, and, in fact, largely originated from the Administration.

          Furthermore, Bush started Iraq, Obama had to end it. Sensible people realize that Bush f*cked up monumentally, and that, as in many such cases, the task of fixing the f*ck up was a lot harder than f*cking it up. You heard more about the wars back then because many of us were outraged at the catastrophically stupid decision. Obama, on the other hand, did about as well as he could have done with the ludicrous hand he was dealt.

          I think that’s all worth keeping in perspective.

  3. Mitch Guthman says

    I have to agree with Dave Schutz. I don’t see how the defense sequester give Obama any leverage at all. Indeed, I would say that on both the sequester and debt ceiling, it is the Republicans who have the upper hand. The reason why the expiration of the Bush tax cuts was considered by people like me as powerful leverage was that the consequence of going over the cliff (and the resulting tax increase) made the GOP shudder with horror but really didn’t bother non-Villagers particularly or even most Democratic members of Congress. Also, it was something that was going to come to him automatically—he didn’t need anybody in Congress to agree to anything to end the push tax cuts. If Obama simply sat on the beach in Hawaii enjoying a shaved ice and just stopped taking calls, he would still have been guaranteed to get nearly everything on his wish lists and the GOP would get nothing on theirs.

    By contrast, Democrats on the whole don’t want the defense cuts any more than do the Republicans. Obama will be under tremendous pressure from Democrats in Congress, whose support he will need on both the budget and the “debt ceiling”. From his public statement, Obama seems to want the defense cuts even less than most Republicans—which is to say, not at all. He’s much more likely to trade spending on social programs in return for not cutting defense. So where’s his leverage?

    Again, that’s the key difference: Obama had the sole power to allow the Bush tax cuts to expire; if he did nothing he would win something Democrats wanted (more revenue) and Republican could not hope to prevent the loss of something they wanted very badly (expiration of the Bush tax cuts).

    Now, having failed to get everything done in one package when he was holding a gun to the Republicans heads, Obama really does need to trade something for something if he wants a deal on the Debt Ceiling or the budget (which is very bad for liberals considering that he isn’t likely to want the things we want but is likely to trade things we do value very highly such as Medicare and Social Security in return for restored spending on things like Defense and corporate subsidies, which on the whole we liberals don’t value very highly at all and certainly not the way Obama values them).

    Now it’s simply a game of chicken and we already known who’s turned chicken time and time again.

    • Jake says

      “By contrast, Democrats on the whole don’t want the defense cuts any more than do the Republicans.”

      An interesting assertion – I would have guessed that congressional Republicans were much more opposed to the defense cuts than the Democrats. I’ve certainly seen many more Republicans than Democrats quoted as looking to block the defense cuts. In fact, I’ve seen many more Republicans quoted as saying they wanted to stop the defense cuts than I have seen Democrats saying they wanted to stop the non-defense cuts.

      Can you provide any evidence for it?

      • Mitch Guthman says

        You are assuming symmetry between the Republican commitment to defense spending and the Democratic commitment to socially beneficial spending. There are more than a few conservative Democrats or Democrats who have been cowed by the village deficit scolds who are terrified to speak out or vote in favor of social spending. So the Democratic interest in stopping the non-defense cuts is far weaker than the Republican interest in stopping defense cuts. Add to that the fact that many of these same Democratic fear being painted as “soft on defense” or have defense plants in their districts or states.

        What you get is a strong constituency to stop the defense cuts but only a weak one to save social spending. You will remember that many people said at the time that the flaw in the sequester was that the interests of Democrats and Republicans was asymmetrical. If I’m right about that, Obama doesn’t have the leverage some people think he has.

        • Jonathan Zasloff says

          Mitch, you are right that at this point the Democrats are opposed to the Defense sequester. What I am arguing is that they SHOULDN’T be opposed to the Defense sequester, and that thus they can use it for leverage against the Republicans. Now, really the Republicans shouldn’t be opposed to it, either, but they are so reality-challenged that normal reasoning and facts simply don’t apply to them. (Repubs shouldn’t have been opposed to raising taxes on the wealthy, either, but liek defense spending, it’s just part of their ideology). Besides, I’m not really in the advice-giving business to the GOP. (Actually, I’m not in the advice-giving business to the Dems, but you see the idea.). So the point of the post is to tell the Dems that there is nothing in terms of real, actual, national security considerations that should trouble them about the sequester, and given the Republican insantiy on the topic, this gives them a potential pressure point.

          • Mitch Guthman says

            Jonathan,

            I agree with you that Democrats shouldn’t be opposed to the defense sequester. Indeed, one of the advantages, in my view, for Obama going over the “fiscal cliff” before seriously negotiating was that could achieve at a stroke and with almost no political cost for the Democrats, cuts in the defense budget that would be impossible with the normal political process. So I say that not only should Democrats not fear the defense sequester, they should embrace it. Nevertheless, while our wishes might be in line with those of most Americans, our thinking isn’t in line with the thinking of the Village or most elected Democrats or even of Obama himself. They fear the defense sequester every bit as much as their Republican counterparts. Indeed, as Don points out, Obama’s own secretary of defense has been leading the charge against the defense sequester.

            Consequently, I don’t see Obama taking your advice and, even if he did and was willing to wield this supposed advantage as ruthlessly as Vladimir Putin, this time he really does need the help of Congressional Democrats because he’s got to actually an increase to the debt limit (as opposed to simply sitting on the beach waiting for a law to automatically expire). I don’t see any way to build enough Democratic support for totally restoring social spending or cutting the defense budget in retaliation if Republicans blocked the restoration of social spending. So, not a really credible bargaining position for Obama.

            Obama’s a really smart guy but he’s the worst negotiator I’ve ever seen and the only one who seems incapable of learning from experience. (Unless, of course, he sees his past results in a more positive light than I do)

  4. Dan Staley says

    The more this Kabuki theater goes on, the less I think POTUS want to gain leverage for a solution. As well as harm a party that seeks to destroy him, and if harming the nation is the price, so be it. Weak.

    • Brett Bellmore says

      I am more and more convinced that Obama doesn’t think he needs anything from Congress, with the possible exception of enough votes in the Senate to block a conviction if he gets impeached. As the Dream act, and war with Libya demonstrated, he doesn’t think he actually needs permission from Congress, in the form of laws, to do what he wants.

      The second term will be an escalating series of regulatory power grabs and rule by executive order, with ‘liberals’ making increasingly strained excuses for our decent into dictatorship.

      On the bright side, I don’t think he’s fond enough of the job to try to cancel the 2016 election.

      But, no, he’s not looking for “leverage” with Congress, he thinks Congress is irrelevant.

  5. Don says

    I don’t know which idea is more ridiculous: that the President would pretend to be against the defense sequester, or that he would extract concessions from the Republicans in exchange for getting rid of it.

    This is the President who appointed Leon Panetta as Defense Secretary, Panetta, who’s been campaigning full-throated against the defense sequester since it was agreed to. If the President liked the defense sequester he would have fired Panetta, or at least gently suggested that Panetta STFU. He didn’t do that. Because the President is just as much against the defense sequester as the Republicans. Or it’s another nine-dimensional chess thing, you decide which is more believable.

    This is also the President who had a winning hand on the Bush tax cuts, only HOURS ago, and managed to lose the one thing he told us for a year he would never give up. If he couldn’t win with those cards, how on earth is he going to bluff the Republicans into giving him something in exchange for killing the defense sequester? Why would the Republicans fall for it? Would you?

    • Brett Bellmore says

      Why would you think he wants the sequester in the first place? Because he really earned that Peace Prize?

        • Don says

          Sorry, I see I screwed up my original post, which should have said “I don’t know which idea is more ridiculous: that the President would pretend to be FOR the defense sequester, or that he would extract concessions from the Republicans in exchange for getting rid of it.”

  6. Tim says

    Maybe someone here can help me. I thought the “fiscal cliff” situation meant that Congress had to come up with something like 1.6 trillion dollars and X amount of revenue (?) before 1/1/13 otherwise all the Bush tax cuts would expire and every federal program would be lose Y% of funding (or something like that). The deal they finally came up with came nowhere near satisfying these conditions and yet everyone’s declaring victory. (Not that I would relish further cuts in our already tattered safety net programs etc.) But if they don’t have to actually satisfy their own rules then there was never any cliff to begin with and they could just have as easily said, “OK, the deal is everyone in Congress gets a cheese biscuit and we’re installing new carpets”, and still declared victory.

    Given that, why should anyone take this sequester thing seriously? Does anyone think that when it comes down to the wire that they won’t just rewrite the rules again and set the stage for the next hostage crisis? Is this how we’ll be governed going forward?

    • Brett Bellmore says

      ““OK, the deal is everyone in Congress gets a cheese biscuit and we’re installing new carpets””

      I think they are, actually. Obama signed a pay raise for all of them during the negotiations.

      They decided to make some of the Bush tax cuts permanent, without any spending cuts to speak of, “kicking the can down the road”. That they only kicked it a couple of months down the road, and we’re going to go through all of this yet again, just underscores how unserious they are.

      The fundamental problem is that they like spending, they hate taxing, so they’re utterly incapable of making the two meet. Republicans would like a bit less spending and taxing, Democrats a bit more of both, but neither are seriously devoted to balancing the budget, or even getting the growth of the debt into sustainable territory. (Currently the former is growing about three times as fast as the latter.)

      There’s a quote of notoriously dubious source, but remarkable prescience: “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

      The majority has made the discovery, the real reason Obama was reelected, and the downward spiral is probably inescapable, at least until things get a LOT worse.

    • Josh G. says

      No Congress can bind the hands of its successors. The “fiscal cliff” was just a game of chicken that Congress set up a couple years back.

      • Tim says

        Yeah, instead of reading headlines like “Fiscal Cliff Imminent” the MSM could have been noting stuff like “Congress Continues to be Unserious” or “2010 Election Results Still Threaten the Nation”. At least Charles Blow touched on this; but after the fact and without acknowledging any culpability on the media’s part.

        • Brett Bellmore says

          Not sure, based on this chart, why you’re identifying the key moment as 2010; Looks to me like the situation actually improved a tiny bit then. I like your first headline, though; Could have used it any time in the last several decades.

  7. Potifar says

    I didn’t even need to read further than the first mention of defense sequester to think “Are you kidding me?” POTUS has no scrotum (I know, poor attempt at a joke…..at first I thought there might be a rhyme there somewhere but oh well…….). It ain’t gonna happen.

  8. Fred Bush says

    Obama flat out said that the defense cuts “will not happen” in a debate, and has declared his personal opposition to the cuts.

  9. KLG says

    Leverage? The president uses leverage only against those of us who elected him. Twice. He doesn’t need much of a fulcrum and the length of the lever arm is inconsequential. He gets it done.

  10. says

    “… the Dubya Regency…”
    Aren’t regencies usually named after the working stand-in not the incapable principal? That would make it “the Cheney Regency”.

  11. Josh G. says

    First of all, let’s not call it the “defense sequester”. Call it the military sequester or the war sequester. Most of what we spend on the military has little or nothing to do with “defense”.

    From a pure Keynesian point of view, military spending, even wasteful spending, does help in a down economy like the one we have now. Certainly not as much as deliberate counter-cyclical fiscal policy would be, but better than nothing.

    But this is a rare chance to cut our obscenely bloated military complex through simple inaction, and it would be a mistake to pass that up, unless we get something really good in return.