Sequestration?

By Francis Pennyworth, Jr.

In the world of politics Sequestration refers to the process of automatically employing mandatory spending cuts in the federal budget if some stated event occurs.  The automatic triggering of mandatory budget cuts is usually related to the either the annual cost of running the government,  the amount of revenue produced by the government, or some other equally relevant event.

The scary thing about sequestration is that it usually involves an indiscriminate, across the board reduction in spending by some stated amount or percentage.  Not that it helps much, there are some exemptions and/or special rules applicable to the present sequestration.

When you think about it, the whole sequester concept smacks of a heavy handed method of controlling Congress.  Kind of like forcing someone to commit suicide if they fail to live a healthy life.  Rather drastic to say the least.  Sequestration also assumes facts not in evidence,  namely that Congress has some degree of desire to negotiate a meeting of the minds.  An assumption which doesn’t work with the current Congress in which the left and right are widely separated and there is no apparent middle ground.

So how did the current sequester come to be?  Whose brain child was it?  And, how did it get passed and who the devil is responsible?

It seems to have all started with the  Budget Control Act of 2011 under which a Congressional Debt Supercommittee was created.  That supercommittee was made up of an equal number of members from both parties of the House and the Senate.  Once formed,  this supercommittee was charged with the responsibility of cutting $1.5 Trillion from the federal budget (good luck there).

A failure to agree to at least $1.2 Trillion in cuts over the next 10 years would, under the Budget Control Act of 2011, trigger automatic budget cuts according to some defined rules (i.e. the sequestration).

Of course, the Supercommittee recessed permanently in November of 2011 without reaching an agreement.  What a surprise!  This predictable failure to reach an agreement triggered sequestration budget cuts of $1.2 Trillion  to be spread out between January 2013 and October 2021.

The Budget Control Act of 2011 was signed into law by President Barack Obama on August 2, 2011 who, at the time, didn’t seem to be too worried about it.  And, in all fairness, neither did the Republicans.  In fact Speaker of the House, John Boehner, didn’t seem to be bothered by the sequestration until after the fact when he began to voice concerns about its affect on the defense budget.  A day late and a dollar short wouldn’t you say?

To make matters even stranger, President Obama, would later call the sequester a “meat cleaver” approach to the deficit which would jeopardize military readiness.  And, at the same time President Obama denied responsibility for the sequestration, the Republicans claimed that it was the President’s idea!

Really?  Is this the twilight zone?  Are we supposed to think sequester just crept into the Budget Control Act of 2011 like an undocumented immigrant?  Maybe it’s the fault of Senate Majority Leader Harry Reid (D) Nevada?  Could be!  After all he’s the guy who, back in the summer of 2011, listened to President Obama’s top aids who brought him the idea.

Wait a second!  If it was White House aids who suggested the sequestration to Speaker Reid, where did they get the idea?  They’re not supposed to sua sponte make up ideas on their own, are they?  Well we know one thing for certain (I think), these mysterious unnamed aids don’t work for the Republicans.

Maybe the answer is simple.  Bob Woodward’s book was just wrong about who met with Speaker Reid and what they said.  You’ll just have to buy your own copy of “The Price of Politics” and decide for yourself.

Lest I forget, here’s a thought for all of you conspiracy theorists.  Maybe the sequester actually was the Administration’s idea.  An idea quietly proffered with the knowledge of two things.  (1.) Sequestration would be immensely unpopular; and (2.) The Supercommittee didn’t have a bat’s chance of coming to a consensus.  Then at the 12th hour, when there would be no practical way to avoid the cuts, the Administration would launch it’s “meat clever” attack and blame the upcoming disaster on the recalcitrant ideologues in the right wing of the Republican party.

Result?  Much needed budget cuts actually happen and all of the voter displeasure falls upon the  Republicans for not agreeing to a less painful haircut.  Could it be possible?  Bob Woodward sure believes his version of the story is the correct one.  But no it all sounds like something that could only happen in Chicago or some other such rough and tumble place.  Too bad, we’ll probably never know all of the facts.

Ok, enough terpsichore.  Let’s back out of the weeds and take a look at the big picture.  This isn’t rocket science!  We spend more than we have and even 100% taxation of the wealthy won’t get us out of the problem.  Given the simplicity of the problem I think we can conclude that Congress is filled with overpaid elected officials who don’t seem to have enough sense to come in out of the rain.

So what’s the take away from all of this?  How does one explain the current fiasco?  I’m afraid I can’t.  No matter whose idea sequestration originally was, both parties ultimately agreed to it.  To put a fine point on it – Congress is  broken and I personally doubt it can be fixed.

It might actually be time to vote them all out and start over again.  Too bad we have to wait until the midterm elections.

I’d like to make some suggestions.  Maybe we should have some minimum educational requirements for admission to the federal congress.  The same goes for the Presidency.  For example, we should require a college degree in some relevant subject matter – like maybe Business or Finance?  Law degrees shouldn’t count.  I’ve got one of those degrees and it’s worthless when it comes to the nuts and bolts of management, finance, banking, and/or economics.  For purposes of understanding the economy, a B.A. degree in Business Administration is far more valuable than a Juris Doctorate.  Shouldn’t these guys at least know the difference between Keynesian and supply-side economics, as well as the history of what has and hasn’t worked.  Otherwise, aren’t we going to make the same stupid mistakes over and over again.

In addition to a minimum relevant education shouldn’t there be some some minimum real life job experience requirements related to the desired position?  Maybe state legislative experience should be required before someone runs for a seat in the federal Congress.  As for the Presidency, it’s a management position and we should require actual management experience.  Possibly Mid Cap or larger corporate management experience and/or experience as a state governor.

If you owned a business grossing a billion dollars a year, would you hire a person to run it who had no previous management experience whatsoever?  If you had the opportunity to establish the rules of the environment in which your business would operate, would you hire a rule maker who didn’t have a working knowledge of finance and macro economics.  How do you think Bill Gates, Oprah, Warren Buffett, Larry Page or Sergey Brin would answer these questions?  When placed in its proper perspective it makes you wonder what we’re doing.