Sequestration: Bad, But Not Bad Enough

Sequestration – automatic across the board cuts in federal spending – was first utilized by Congress in the 1980s as a stick designed to encourage lawmakers to make difficult budgetary choices related to deficit reduction. In theory the sequester mechanism made deficit reduction inevitable – lawmakers could either decide where to cut, or have those decisions made for them. In practice, lawmakers repeatedly found creative ways to avoid both the sequester and serious deficit reduction.

The version of sequestration that did finally have some teeth gave lawmakers reasons to see it enforced. Under the 1990 Omnibus Budget Reconciliation Act (OBRA), if, for example, the defense appropriations came in over budget during the reconciliation process, the sequester mechanism called for cuts in defense spending alone. Prior to that, if one Appropriations subcommittee exceeded its target, the pain was distributed across all discretionary programs. Thus under OBRA, only the shirkers paid the full cost of their irresponsible behavior.

The looming sequester due to take effect March 1 is a page from the old playbook. (Interestingly, its significance seems to have been missed by younger staffers during the debt increase negotiations of 2011.) This time, however, the breadth of the pain is allocated politically as much as programmatically. Defense discretionary programs bear a disproportionate share of the cuts so that (in theory) Republicans and Democrats are equally concerned about its effects.

Many have argued that the sequester is a bad idea – it replaces responsible budgeting with a meat ax.  However, there is little in the record to suggest that the intent of the 2011 agreement was to budget through sequestration. The intent – since orphaned by both parties – was to make inaction unacceptably costly.  In the vernacular of Political Science, the sequester was supposed to make the reversion point so extreme that lawmakers with very different fiscal priorities would see compromise as an attractive alternative.

Things don’t seem to be turning out that way. Why not? We think that lawmakers who hoped the sequester would bring about a deal made a fundamental miscalculation. The reversion point under the current agreement does not reflect the more polarized political atmosphere of the times. When lawmakers’ ideal points are far apart, compromise requires that lawmakers face an even more extreme reversion point. The cost of the current sequester for members of Congress – as it was in the 1980s – is primarily less control over how things happen rather than whether they happen at all. Any compromise to successfully avert sequester must impose just as much, rather than less, fiscal pain. For lawmakers on both sides, it’s less clear than it might be that doing something is a better outcome than doing nothing.

Congress often uses deadlines to promote legislative reviews and updating of policies, but typically the reversion point is the complete and total expiration of a program or its funding. Thus, while the general consensus seems to be that sequestration is a bad idea, perhaps the current version is not bad enough.

E.Scott Adler and John Wilkerson are the authors of Congress and the Politics of Problem Solving (Cambridge 2012)