Bob Woodward: Sequester Was Obama's Idea

From Real Clear Politics

Bob Woodward: Sequester Was Obama's Idea

CHRIS WALLACE, "FOX NEWS SUNDAY" HOST: Bob, as the man who literally wrote the book about the budget battle, put this to rest. Whose idea was the sequester, and did you ever think that we'd actually get to this point?

BOB WOODWARD: First, it was the White House. It was Obama and Jack Lew and Rob Nabors who went to the Democratic Leader in the Senate, Harry Reid, and said, 'this is the solution.' But everyone has their fingerprints on this. (FOX News Sunday, February 17, 2013)

And From Politico From September 7, 2012

Bob Woodward book could bolster Republican attack on W.H.

 Bob Woodward's book delves into across-the-board cuts to the defense budget. | AP Photo

By AUSTIN WRIGHT | 9/7/12 5:00 AM EDT

A forthcoming book could give new ammunition to Republican hawks eager to blame the Obama administration for looming, across-the-board cuts to the defense budget.

The book “The Price of Politics,” by Washington Post Associate Editor Bob Woodward, makes it clear the idea for the draconian spending cuts originated in the White House – and not in Congress.

According to the book, excerpts of which were obtained by POLITICO ahead of the Sept. 11 release, President Barack Obama’s top deputies believed the prospect of massive defense cuts would compel Republicans to agree to a deficit-cutting grand bargain.

Then-OMB Director Jack Lew, now the White House chief of staff, and White House Legislative Affairs Director Rob Nabors pitched the idea to Senate Majority Leader Harry Reid (D-Nev.), Woodward writes. Under the deal, which Republicans accepted after several rounds of bargaining, the federal debt ceiling was raised — staving off a potential financial crisis.

Called sequestration, the automatic budget cuts would reduce federal spending by roughly $1 trillion over the next decade, with half the savings taken from national security programs. Despite agreeing that sequestration is bad policy, since all accounts are reduced by an equal amount with no strategy, Republicans and Democrats have been unable to reach a deal to avert the cuts, which take effect Jan. 2.

Instead, the two sides have been locked in a vicious blame game.

“This book makes clear that the president put his own political interests ahead of our national security,” said Kevin Smith, a spokesman for House Speaker John Boehner (R-Ohio).

“House Republicans have passed a plan to protect our troops by replacing the sequester with common-sense spending cuts and reforms,” Smith told POLITICO. “It’s long past time for the president to show some leadership and present a concrete plan to do the same.”

Democrats have also accused Republicans of being responsible for the looming cuts to military spending, which Defense Secretary Leon Panetta has said would have a “catastrophic” effect on national security. “It’d be like shooting ourselves in the head,” he has said.

The White House on Thursday declined a request for comment. But administration officials have acknowledged all along that sequestration was meant to be so terrible to prompt lawmakers to compromise and avoid it. Jeffrey Zients, acting director of the White House Office of Management and Budget, told the House Armed Services Committee last month it was intended as a “forcing function.”

And the excerpts from Woodward’s book may give only a portion of the story. At a House Budget Committee hearing in February, Rep. Chris Van Hollen of Maryland, the committee’s top Democrat, said Republicans could have opted for revenue increases instead of Pentagon cuts.

“In designing the sequester, the offer was made to our Republican colleagues to say, instead of having these particular defense cuts as part of sequester, we can get rid of a lot of special interest tax loopholes,” Van Hollen said. “They chose to put the defense cuts on the table.”

In his book, Woodward describes the behind-the-scenes haggling last year that laid the groundwork for sequestration.

Administration officials “had finally decided to propose using language from the 1985 Gramm-Rudman-Hollings deficit reduction law as the model for the trigger,” Woodward explains. “It would require a sequester with half the cuts from defense, and the other half from domestic programs. There would be no chance Republicans would want to pull the trigger and allow the sequester to force massive cuts to defense.”

More than a year later, Congress finds itself in almost exactly the same position: gridlocked, unable to work out a sensible solution to a looming crisis.

For his part, the president has placed the blame squarely on Congress.

“Sequestration is basically a bargain that Congress made with itself,” Obama said in an interview last month with an NBC TV affiliate in San Diego. “There is no reason why these additional military cuts should go through, as long as Congress does its job.”

Kate Brannen contributed to this report.

And From The Washington Post

Obama’s sequester deal-changer

By Bob Woodward, Friday, February 22, 4:59 PM

Bob Woodward (woodwardb@washpost.com) is an associate editor of The Post. His latest book is “The Price of Politics.” Evelyn M. Duffy contributed to this column.

Misunderstanding, misstatements and all the classic contortions of partisan message management surround the sequester, the term for the $85 billion in ugly and largely irrational federal spending cuts set by law to begin Friday.

What is the non-budget wonk to make of this? Who is responsible? What really happened?
The finger-pointing began during the third presidential debate last fall, on Oct. 22, when President Obama blamed Congress. “The sequester is not something that I’ve proposed,” Obama said. “It is something that Congress has proposed.”

The White House chief of staff at the time, Jack Lew, who had been budget director during the negotiations that set up the sequester in 2011, backed up the president two days later.
“There was an insistence on the part of Republicans in Congress for there to be some automatic trigger,” Lew said while campaigning in Florida. It “was very much rooted in the Republican congressional insistence that there be an automatic measure.”

The president and Lew had this wrong. My extensive reporting for my book “The Price of Politics” shows that the automatic spending cuts were initiated by the White House and were the brainchild of Lew and White House congressional relations chief Rob Nabors — probably the foremost experts on budget issues in the senior ranks of the federal government.

Obama personally approved of the plan for Lew and Nabors to propose the sequester to Senate Majority Leader Harry Reid (D-Nev.). They did so at 2:30 p.m. July 27, 2011, according to interviews with two senior White House aides who were directly involved.

Nabors has told others that they checked with the president before going to see Reid. A mandatory sequester was the only action-forcing mechanism they could devise. Nabors has said, “We didn’t actually think it would be that hard to convince them” — Reid and the Republicans — to adopt the sequester. “It really was the only thing we had. There was not a lot of other options left on the table.”
A majority of Republicans did vote for the Budget Control Act that summer, which included the sequester. Key Republican staffers said they didn’t even initially know what a sequester was — because the concept stemmed from the budget wars of the 1980s, when they were not in government.
At the Feb. 13 Senate Finance Committee hearing on Lew’s nomination to become Treasury secretary, Sen. Richard Burr (R-N.C.) asked Lew about the account in my book: “Woodward credits you with originating the plan for sequestration. Was he right or wrong?”

“It’s a little more complicated than that,” Lew responded, “and even in his account, it was a little more complicated than that. We were in a negotiation where the failure would have meant the default of the government of the United States.”

“Did you make the suggestion?” Burr asked.

“Well, what I did was said that with all other options closed, we needed to look for an option where we could agree on how to resolve our differences. And we went back to the 1984 plan that Senator [Phil] Gramm and Senator [Warren] Rudman worked on and said that that would be a basis for having a consequence that would be so unacceptable to everyone that we would be able to get action.”
In other words, yes.

But then Burr asked about the president’s statement during the presidential debate, that the Republicans originated it.

Lew, being a good lawyer and a loyal presidential adviser, then shifted to denial mode: “Senator, the demand for an enforcement mechanism was not something that the administration was pushing at that moment.”

That statement was not accurate.

On Tuesday, Obama appeared at the White House with a group of police officers and firefighters to denounce the sequester as a “meat-cleaver approach” that would jeopardize military readiness and investments in education, energy and readiness. He also said it would cost jobs. But, the president said, the substitute would have to include new revenue through tax reform.

At noon that same day, White House press secretary Jay Carney shifted position and accepted sequester paternity.

“The sequester was something that was discussed,” Carney said. Walking back the earlier statements, he added carefully, “and as has been reported, it was an idea that the White House put forward.”
This was an acknowledgment that the president and Lew had been wrong.

Why does this matter?

First, months of White House dissembling further eroded any semblance of trust between Obama and congressional Republicans. (The Republicans are by no means blameless and have had their own episodes of denial and bald-faced message management.)

Second, Lew testified during his confirmation hearing that the Republicans would not go along with new revenue in the portion of the deficit-reduction plan that became the sequester. Reinforcing Lew’s point, a senior White House official said Friday, “The sequester was an option we were forced to take because the Republicans would not do tax increases.”

In fact, the 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. His call for a balanced approach is reasonable, and he makes a strong case that those in the top income brackets could and should pay more. But that was not the deal he made.

Read more from PostOpinions: Bob Woodward: Time for our leaders to delegate on the budget Robert J. Samuelson: The lowdown on Lew Jennifer Rubin: Jack Lew’s truth problem Eugene Robinson: The sequester madness