“The entire DNA of the enforcement mechanism in the sequester was to bring both sides back on the table. The Democrats would compromise more in entitlements, that Republicans would compromise more on revenue. So the idea that this moves the goalposts is just—I mean, there’s not even an ounce of—there’s not even an ounce of truth to that.”
—Gene Sperling, White House economic adviser
Sperling offers a hard-to-swallow denial of bad-faith negotiating tactics by the White House and offers an incoherent refutation of charges from journalist Bob Woodward.
The threat of an across-the-board cut to certain discretionary expenses in the federal budget, including the defense budget, came about as a solution to the impasse over raising the debt ceiling in the summer of 2011.
Journalist Bob Woodward documented how the Obama administration suggested using the sequester as a trigger to motivate Republicans and Democrats in Congress to forge a compromise through a bipartisan super committee.
The super committee failed to reach any compromise. President Obama vowed to veto any subsequent compromise deal that sidestepped the effects of the sequester without meeting its deficit reduction goals.
The sequester was scheduled to go into effect on Jan 1, 2013. On Dec. 31, 2012, Republicans and Democrats agreed on a tax compromise while delaying budget sequestration until March of 2013.
On Feb. 25 the director of the president’s National Economic Council, Gene Sperling, appeared on CNBC’s “Squawk Box” television program. Sperling said Woodward’s charge in an op-ed that the administration is “moving the goalposts” in the negotiations is false.
Analyzing the Rhetoric
What did Bob Woodward say about those goalposts?
Woodward was clear about the break of faith in the sequester negotiations (bold emphasis added):
(T)he final deal reached between Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.) in 2011 included an agreement that there would be no tax increases in the sequester in exchange for what the president was insisting on: an agreement that the nation’s debt ceiling would be increased for 18 months, so Obama would not have to go through another such negotiation in 2012, when he was running for reelection. So when the president asks that a substitute for the sequester include not just spending cuts but also new revenue, he is moving the goal posts.
There’s a small loophole in Woodward’s analysis.
Republicans were unwilling to allow tax increases as part of the budget deal, but willing to close tax loopholes. In other words, Republicans were able to distinguish between “tax increases” and increasing taxes by eliminating loopholes. If Republicans can do that then anybody should be able to do it, Woodward included. Therefore, Sperling has some justification for his claim that the goalposts didn’t move. Sperling implies the Democrats never got the Republicans to reduce the deficit by eliminating tax loopholes, so they intend to press for it as the March deadline looms.
The American Taxpayer Relief Act of 2012
During his remarks on “Squawk Box,” Sperling make a pair of paradoxical statements. First, he said that the Democrats recognize the Republicans agreed to a tax increase that decreases the deficit. Second, he said that the Republicans have now taken an absolutist stance, that they will not find even one dime of higher revenue by eliminating tax loopholes.
So the Republicans compromised by allowing higher taxes. But they’re refusing to compromise by an unwillingness to end tax loopholes and deductions for higher income earners.
We mentioned above a tax compromise that delayed the sequester when it was scheduled to take effect on Jan 1, 2013. The resulting bill, the American Taxpayer Relief Act of 2012, delayed the sequester and established a compromise on taxes. The bill made permanent the Bush tax cuts except for higher income earners, thus having the effect of a relative tax hike on the latter. The bill also reintroduced a phase-out of income tax deductions for higher income earners, eliminating some tax deductions for that group. So the Republicans compromised on revenue there, too.
Sperling’s spurious speech
The Republicans clearly felt they had finished negotiating on revenue end of the sequestration problem with the ATRA. And that accounts for the charge that Mr. Obama is moving the goalposts when he says it’s time to negotiate more revenues.
Sperling dismisses Woodward’s charge of moving the goalposts as lacking even “an ounce of truth.” But Sperling’s rhetoric on the current state of negotiations belies his claim.
Sperling and the sequester’s DNA
The “DNA” of the sequester was always supposed to bring both sides to the table. It was always supposed to draw the Republicans to the table twice just on revenues? What is the Democrat compromise so far?
Sperling and the White House idea of compromise
The White House isn’t moving the goalposts, says Sperling, because the White House position on the deal hasn’t changed:
We acknowledge (a Republican compromise on tax cuts) was done. But to get a deal compromised, you still have to do some closing of revenue–of loopholes and tax expenditures to raise revenues, together with entitlements.
Sperling discounts without comment the Republican position that the negotiations on revenue were finished with the ATRA. The Republicans compromised once, but the administration’s position has not changed. Therefore, the Republicans need to compromise again.
Sperling and hypocritical absolutism
Sperling charges the House Republicans with taking an absolutist position on more revenues:
I think for them to choose that they are now going to take an absolutist position that you can’t find one single penny of revenues, not one single penny of loopholes for corporate tax expenditures, that’s an absolutist position, and it’s their choice to do that, but then that’s going to inflict harm on our economy.
The Republicans already compromised on revenue. Sperling’s rhetoric exaggerates the supposed absolutist position of the Republicans. Worse for Sperling, he implicitly signals the hypocrisy of the administration: The administration takes the absolutist position that the Republicans must compromise twice on revenues or no deal.
The facts are clear in the sequestration negotiation: The Republicans compromised on revenues with the ATRA. As things stand now, the Republicans are the only group that definitely isn’t going to get what it wants in the negotiations. If the Democrats didn’t get a big enough compromise on revenues from the Republicans in December then they’ll try again with March approaching. To the extent that the Democrats’ goal in the negotiations has not changed, the goalposts have not changed. To the extent that Democrats led Republicans to believe that the revenue portion of sequestration was negotiated with the ATRA, leaving the budget cuts as a separate issue for later, the goalposts moved considerably.
It’s worth noting that Mr. Obama threw down that gauntlet on Dec. 31, 2012 (bold emphasis added):
Now, if Republicans think that I will finish the job of deficit reduction through spending cuts alone — and you hear that sometimes coming from them, that sort of after today we’re just going to try to shove only spending cuts down — well — (laughter) — shove spending cuts at us that will hurt seniors, or hurt students, or hurt middle-class families, without asking also equivalent sacrifice from millionaires or companies with a lot of lobbyists, et cetera — if they think that’s going to be the formula for how we solve this thing, then they’ve got another thing coming.
The president’s remarks were taken by some as an effort to undo the last-minute negotiations.
The fiscal cliff deal was done by early January, with the stage already set for the next set of sequestration negotiations. But with no binding compromise yet from the Democrats.
Sperling’s rhetoric mainly serves to strengthen Woodward’s point. The Republicans have clearly engaged in a binding compromise. The Democrats haven’t made a corresponding compromise, yet Sperling tries to argue that the Republicans may take the “absolutist” position of not giving ground twice on revenues. If the sequestration trigger is supposed to bring Democrats to the table then we should expect that result at some point. If the Democrats don’t come to the table with a compromise then something’s amiss with the goalposts. The Republicans have made a conspicuous compromise already on revenues.
Sperling’s “Squawk Box” appearance served two main purposes. He attacked Republicans for a supposed unwillingness to compromise, and he offered distractions obscuring Democrats’ failure to offer any meaningful compromise of their own.
“there’s not even an ounce of truth to that.”
“that’s an absolutist position, and it’s their choice to do that”
It seems the Obama administration has adopted an absolutist position. Accusing the Republicans of having an absolutist position might make people forget about the Democrats’ absolutism.
Sperling, Gene. “Will Congress Compromise on Sequestration?” Interview by Joe Kernen, Becky Quick, and Andrew Ross Sorkin. Squawk Box. CNBC. CNBC, 25 Feb. 2013. Television. Transcript.
Woodward, Bob. “Obama’s Sequester Deal-changer.” Washington Post. The Washington Post Company, 22 Feb. 2013. Web. 27 Feb. 2013.
Adler, Loren, and Shai Akabas. “The Sequester: What You Need to Know.” Bipartisan Policy Center. Bipartisan Policy Center, 22 Feb. 2013. Web. 28 Feb. 2013.
Swier, Richard. “Killing Charitable Deductions Slowly – the Sunset of PEP and Pease.” WatchdogWire. Franklin Center for Government & Public Integrity, 20 Feb. 2013. Web. 28 Feb. 2013.
Daley, David. “Obama to Boehner: “You Get Nothing. I Get That for Free”.” Salon.com. Salon Media Group, Inc, 23 Dec. 2012. Web. 28 Feb. 2013.
Stephanopoulos, George. “Sen. Mitch McConnell: ‘The Tax Issue Is Finished’.” ABC News. ABC News Network, 6 Jan. 2013. Web. 28 Feb. 2013.
Obama, Barack. “Remarks by the President on Fiscal Cliff Negotiations.” The White House. The White House, 31 Dec. 2012. Web. 28 Feb. 2013.
Gregory, Paul Roderick. “Republicans Should Walk Away Until Obama Acts As A Grown Up President (Updates).” Forbes. Forbes Magazine, 31 Dec. 2012. Web. 28 Feb. 2013.