If you thought Republican presidential hopefuls were insane to refuse to raise their hands during a 2011 primary debate when asked if they'd support a deficit-reduction deal with $10 in spending cuts to $1 in tax increases, look at Washington today. In August 2011, President Barack Obama signed a debt-ceiling deal that promised more than $2 trillion in spending cuts over a decade and zero in new revenue.
The package included $1.2 trillion in "sequestration" cuts — $85 billion this year out of a $3.8 trillion federal budget — that are supposed to begin on March 1. This week, Senate Majority Leader Harry Reid and other Democrats told reporters that they want to change the deal so that it also includes tax increases. Senate Budget Committee Chairwoman Patty Murray wants to change the deal to 50-50 between spending cuts and tax increases.
Does it matter that Washington just passed the fiscal-cliff deal that raised taxes by about $600 billion?
Of course not.
Washington these days has no problem with not getting a job done. The 2011 Budget Control Act's sequestration formula for cutting $1.2 trillion was an invitation to disaster. The idea was to propose cuts so painful that a 12-member supercommittee would have to work together to craft smarter cuts. But members couldn't agree on cuts, they could only agree to fail.
Defense Secretary Leon Panetta correctly warned that the sequester formula cut too deeply into national security, doubling defense cuts to close to $1 trillion. Even as U.S. troops remained at war in Afghanistan and at risk across the globe, Panetta warned, the sequester cuts would "hollow out the force."
Still, the president and Senate Democrats have been saving their fire to push for more tax increases. As Washington's most prominent budget hawk, House Budget Committee Chairman Paul Ryan pushed legislation to direct cuts elsewhere to spare defense, but the House cannot pass bills by itself. "We think these sequesters will happen because the Democrats have rejected our efforts to replace those cuts with others and have offered no alternatives," Ryan said.
Now it turns out that gross domestic product shrank by 0.1 percent last quarter. White House spokesman Jay Carney acknowledged that the dip had something to do with the "uncertainty created by the prospect of sequester," especially in the defense sector.
This would be a good time to demand that Congress spare defense spending. Alison Acosta Fraser, director of economic policy at the conservative Heritage Foundation, believes the president should push for entitlement reform to replace the sequester cuts.
Instead, Carney talked up the need to raise taxes on oil companies and "corporate jet owners."
Fraser believes the Senate and Obama, with their "high-stakes brinksmanship, intentionally" are leading the country down the path of less economic prosperity, less opportunity for growth and less national security.
And: "When you have an administration whose own secretary says don't do this, but the president can't or won't lead on this, then we have a problem."
Debra J. Saunders writes for the San Francisco Chronicle. Her email address is dsaunders@sfchronicle.com.
