Who Birthed the Sequester?

National Journal

Who really birthed the sequester? To hear Republicans tell it, the White House all but single-handedly spawned the huge across-the-board cuts to defense and domestic programs, the enforcement “trigger” of the summer 2011 debt-ceiling deal.

But is there really any “Rosebud” moment to be recollected from that year's agonizing fiscal negotiations to illustrate that Obama or any other individual, or party, was solely responsible for conceiving this idea?

House Speaker John Boehner, R-Ohio, and other Republicans keep insisting that there is, even while there can be no dispute that they had to collaborate with Democrats in seeing the sequester become law. Yet Republicans still see some gain in saying it was Obama who came up with the idea for the sequester, explaining that the president didn’t want the debt limit to get in the way of his 2012 presidential campaign. Lately, they have sought to brand the cuts the "Obamaquester."

Support for this Republican mantra gained momentum with the release in September of the book The Price of Politics, by Washington Post Associate Editor Bob Woodward. In it, Woodward asserts that the sequester was the idea of then-Office of Management and Budget Director Jacob Lew and White House Director of Legislative Affairs Rob Nabors. The debate got fresh fodder last weekend when Woodward wrote an op-ed article on the same topic for The Post.

But Democrats and senior administration officials have said that is not the complete picture and that Boehner and other Republicans have been engaging in revisionist history by disingenuously trying to downplay their contributing roles. For instance, Rep. Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, has told National Journal: “I find it curious that the speaker is now disavowing the deal [the final 2011 Budget Control Act, including the sequestration], considering he had said he got 98 percent of what he wanted.” He was referring to Boehner saying during an interview aired Aug. 1, 2011, on the CBS Evening News that “when you look at this final agreement that we came to with the White House, I got 98 percent of what I wanted. I’m pretty happy.”

And on the House floor Thursday, Minority Whip Steny Hoyer of Maryland pushed back on the GOP effort to blame the White House for the sequester.

In fact, Hoyer noted, six days before Republicans claimed Nabors first presented the sequester idea to them on Capitol Hill during a July 25, 2011, meeting, a House Republican bill had been passed to limit government spending — known as the “Cut, Cap, and Balance Act” — that “had as its fallback a sequester if the objectives of that bill were not reached.”

Boehner spokesman Michael Steel responded: “The idea of a sequester dates back to Gramm-Rudman-Hollings Act in the 1980s. No one is saying President Obama—or Jack Lew—invented it. The point is that they insisted it be included in the Budget Control Act, because they didn’t want to face another debate over the debt limit before the president's reelection.”

With $85 billion in first-year sequestration cuts set to kick in on Friday, it’s worth looking back on how the idea came to be—if for no other reason than to offer a lesson in how Republicans and Democrats, Congress and the White House make policy when there’s a gun to their heads, as was the case in the summer of 2011 when the debt-limit crisis loomed over Washington.

Senior congressional Republican aides claim that the first time a sequester plan was broached was during a visit to the Capitol on July 25, 2011, from Nabors, who met with Boehner’s then-chief of staff, Barry Jackson, and the speaker’s policy director, Brett Loper. 

What Nabors had to deliver at that meeting was a sequester concept devised at the White House by Lew and others as a way to end months of haggling over raising the debt ceiling.

At that time, Republicans and Democrats deadlocked over rival approaches to extend the $14.3 trillion debt ceiling. There were just 10 days left before the Aug. 2 deadline by which the Treasury Department said the nation would lose the ability to pay all of its bills.

Nabors is described as putting forth to Jackson and Loper during that closed-door meeting a “sequester” plan as the White House’s latest compromise. Senate Majority Leader Harry Reid also got a similar rundown. The idea was not novel or plucked out of thin air; such an enforcement process dated from at least the Balanced Budget and Emergency Deficit Control Act of 1985—better known as the Gramm-Rudman-Hollings Act—which set deficit targets and called for a sequester to go into effect if they were not met.

In this case, the idea was pitched as a way to address what had been a key issue: how to accommodate congressional Republicans’ demands for dollar-for-dollar spending cuts in return for Obama’s request to raise the borrowing authority by $2.1 trillion—and to authorize that entire amount in a single vote so that another debt-ceiling crisis would not have to be addressed during the 2012 election year.

The two sides were seen as fast agreeing on about $900 billion in cuts, some identified in earlier bipartisan negotiations. But the rub against doing what Obama wanted was the question of how to ensure Congress would follow through with the remaining roughly $1.2 trillion in cuts once the full amount of the debt ceiling he was requesting was already approved. The White House’s proposed sequester would compel Congress to follow through with the further reductions by November or face unappealing automatic cuts, split between domestic and defense spending.

In response, Boehner aides Jackson and Loper expressed reluctance and skepticism, suggesting to Nabors that this “sequester” was not as good a plan as one the House Republicans already had. The Republican strategy had come to involve voting on about $1 trillion in cuts right away and allowing a smaller debt-limit increase, then working on more cuts and tax and entitlement reform before voting on another debt-limit increase in 2012.

But Obama was ruling that out, even threatening to veto it, arguing that a shorter-term debt-limit increase could create uncertainty by risking another bitter partisan fight and a default within only a matter of months.

“The only bottom line that I have is that we have to extend this debt ceiling through the next election, into 2013. And the reason for it is we’ve now seen how difficult it is to get any kind of deal done,” Obama said during a July 22, 2011, news conference.

The sequester plan that Nabors outlined at the Capitol was refined, with Senate Majority Leader Mitch McConnell and Vice President Joe Biden both weighing in. As part of a final, negotiated deal, called the Budget Control Act, there was agreement on $900 billion in spending cuts and the creation of a bipartisan Joint Select Committee on Deficit Reduction, which would negotiate the $1.2 trillion more in cuts. If that so-called super committee failed, or if Congress did not follow through with its recommendation, automatic cuts would begin on Jan. 2, 2013.

Administration officials do not deny that a sequester plan was discussed at the July 25, 2011, meeting between Nabors and Jackson and Loper. But they say that was not the first time the discussion of such an enforcement mechanism—a la Gramm-Rudman-Hollings—had been brought up in various negotiations, dating from bipartisan talks with House and Senate members led by Biden earlier in the year. “It was always in the air,” a senior White House aide told National Journal.

In fact, there is some outside evidence that this is true, beyond the fact House Republicans had passed a bill only six days earlier containing its own sequester back-up plan. News accounts of even earlier talks involving congressional leaders and Obama at the White House mention the notion of a deal involving “triggers” that would force Congress to follow through with agreed cuts. 

Democrats also note that even a plan offered by McConnell which would have given the president authority to raise the ceiling in several steps would, by its own nature, have had to also involve a kind of trigger mechanism. Under McConnell’s plan, the president would have been granted the authority to raise the ceiling to the full amount requested by the White House in two subsequent tranches, both of which could be blocked through congressional resolutions of disapproval that required a two-thirds majority. That gave the White House the opportunity to raise the debt ceiling while also giving Republicans a chance to vote against it.

But there was a part missing in that equation: How do you ensure that $1.2 trillion would be cut? According to one senior Senate Democratic aide, “That’s where the sequester came in, but it was a pretty obvious solution since there needed to be some kind of enforceable mechanism if Republicans were going to go along with the McConnell plan. They [Republicans] would not accept a plan where they voted against the second tranches of the ceiling, but were left with no guarantee that the cuts would actually happen.”

The aide said that is what Democrats mean when they argue that the sequester came about at the Republicans’ behest. “We obviously would have been OK with just the $900 billion in cuts, and some kind of an agreement to seek more. But because Republicans demanded dollar-for-dollar, we were forced to find a way to get from $900 billion to $2 trillion. It is really ridiculous for them to try to wriggle out now. If they had not insisted on dollar-for-dollar or had been open to revenues, the sequester would not exist.”

Van Hollen also noted that an offer had been made to have revenues, such as closing special-interest tax loopholes, incorporated into the plan instead. But he said that Republicans dismissed that, and that they are the ones who decided to leave the defense cuts in the plan. Those military cuts are the ones House Republicans now spew the most anger about, and they have even since passed once-chamber legislation to soften them through deeper cuts to social and safety-net programs.

All the while, Democrats reiterated that the final deal—ultimately supported by majorities in both chambers—was later depicted by Boehner as “98 percent of what I wanted.”

But a senior GOP congressional aide has told National Journal it is simply not fair to refer to that remark by Boehner without also noting the context in which it was made—that is, that it was made months before the super committee failed, and after what the aide said had been personal commitments to Boehner from Reid and Obama that the panel would get its work done.

Based on those assurances, the aide said, Boehner truly felt that the Budget Control Act would result in the $1.2 trillion in discretionary spending caps and a package of entitlement and tax reforms that were being promised, and so he went along with the agreement, including its sequester trigger. “Obviously, the second part didn’t happen,” the aide said.

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