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February 25, 2013

The Sequester Fight Is the Bush Tax Cut Extension Battle, but in Reverse

Posted in: Barack Obama

The same basic dynamic that controlled the fight over the Bush tax cut extension deal is currently at play in the sequester fight, except this time the shoe is on the other foot.

Democrats wanted taxes increased and Republicans didn’t. Normally when there is a disagreement nothing happens, except the Bush tax cuts were set to expire anyway. Democrats were guaranteed to get their tax increase, even though both sides thought the increase was poorly designed. Republicans basically had only two choices: accept a smaller tax increase or be responsible for allowing a huge one to take place. Once the deadline was reached, the Republicans were forced to fold. That was a unique circumstance where the legislative status quo favored Democrats, so they “won.”

Now Republicans want all spending cuts and the Democrats don’t. This time it is a package of all spending cuts that is guaranteed to take place if nothing is done, even though all sides agree the cuts are poorly designed. Republicans seem to be banking on the fact that once the deadline is reached, Democrats are going to only have two options: adopt less indiscriminate replacement cuts or allow the poorly designed cuts to take place. The need for the new continuing resolution at the end of March will give Republicans a chance to replace the sequester with better designed cuts.

For years Democrats tried and failed to get Republicans to agree to tax increases by offering them spending cuts in exchange. It is absurd to think that now that Republicans have guaranteed spending cuts Democrats could somehow convince them to accept tax increases so that federal spending could be increased. This time the legislative status quo favors the Republican position, so they hold the leverage.

Why the White House ever thought preemptively giving away spending cuts would make the GOP more likely to agree to tax increases still remains a mystery.


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