Remember when the federal government “cut” a measly $37 billion in spending in 2011 and Obama hailed it as the “largest annual spending cut in our history”? Apparently even those cuts were full of accounting gimmicks, like counting money for projects that were already finished or cancelled. My personal favorite:
At the Census Bureau, officials got credit for a whopping $6 billion cut, simply for obeying the calendar. They promised not to hold the expensive 2010 census again in 2011.
Quite expectedly, this has made fiscal conservatives in Washington less eager to support such nuanced “deals” to cut spending, and more eager to support larger, less-nuanced slashes.
Many have embraced the sequester, a looming $85 billion across-the-board cut set to take effect March 1. Obama and GOP leaders have said they don’t like the idea: the sequester is a “dumb cut,” in Washington parlance, which would cut the government’s best ideas along with its worst without regard to merit.
But at least, conservatives say, you can trust that this one is for real.
This is the kind of stuff I was saying in my post on why I love the debt ceiling. We can all think of more ideal or more practical ways to trim the least efficient parts of the federal government (Tyler Cowen would like to cut farm support programs, as would I.) But in the real world, politicians don’t have incentives to cut inefficient spending that is disproportionately promoted by various special interests.
Perhaps crude tools like the debt ceiling – or in this case the “sequester” that was itself born out of the debt ceiling debates – may actually be better than nothing. There’s certainly a risk that useful programs (i.e. programs that address negative externalities or create positive ones) will be cut along with the inefficient ones, but it seems politically impossible to cut only the inefficient ones, and I suspect that the amount of useful programs may be smaller than some might believe. Perhaps they could be more easily restored in the future if necessary anyway.
So I am encouraged by reports that the delayed sequester cuts are supposedly becoming “more likely,” though I will still be least surprised by another “temporary” delay. And if the sequester actually goes through, I will be even more surprised if the sledgehammer approach doesn’t result in yet more gimmicks and special protections for special interests.
But one can always hope.