As the pre-Thanksgiving deadline nears for the super committee to reach a deal to cut $1.2 trillion from the federal budget over the next decade, some bold thinkers are beginning to suggest that the across-the-board cuts a failure to agree would trigger might be the the best possible outcome.
The Democrats have rejected an offer by the GOP to raise revenue by $300 billion over ten years in return for making the Bush tax cuts permanent. As much as I’d like to see the cuts made permanent, I find myself shuddering at the notion of Uncle Sam having all that extra money to waste.
Would across the board budget cuts really be worse than a bad budget deal that features the tax hikes Democrats so ardently desire?
Veronique de Rugy of the Mercatus Center, Dan Mitchell of Cato, and Peter Suderman, an editor at the libertarian Reason magazine, are arguing that sequester (the process by which funds would be withheld) is preferable to a lousy deal.
The big fear for Republicans is that a failure to reach a deal will trigger cuts in the Defense spending. Democrats fear Medicare cuts. I have to confess that in our increasingly dangerous world, the prospect of skimping on defense bothers me. As Mitchell writes, Democrats on the committee are counting on these fears to propel GOP members into a deal:
Republicans instinctively want more defense spending, so Democrats are trying to exploit this vulnerability. They are saying – for all intents and purposes – that the defense budget will be cut unless GOPers agree to a tax hike.
Republicans should not give in to this budgetary blackmail.
Mitchell points out that the cuts don’t begin to kick in until 2013. He argues that there is ample time for defense hawks to remedy the situation before the cuts go into effect. (He also says that a conservative argument can be made for cutting defense.)
Meanwhile, Suderman argues that the $850 billion that would be cut by 2021 would return the defense budget to 2007 levels, which he believes is sufficient. The U.S. would still be responsible for 40 percent of global military spending. Hawk that I am, I am impressed by Suderman's argument:
The ideal outcome from the Super Committee would be a deal to reduce spending even more than the sequestration process calls for. But with predictable gridlock between panel members over taxes and entitlements already setting in, that doesn’t seem likely.
Sequestration may not be perfect, but, even with its limitations, it’s probably the best plausible result. So go ahead, Super Committee. Pull that trigger.
Is it time to stop worrying about a deal and learn to love sequestration?