Last night, Obama signed an executive order, bringing the dreaded "sequestration" into effect.
That sequestration will lop off $85 billion from government spending this year, via across-the-board cuts to defense and every domestic agency.
Economically, the austerity is dumb (because the economy is still weak) and pragmatically, the across-the-board nature of the cuts is a silly way to cut spending.
And yet, for now, sequestration is here.
What makes it really pathetic is this chart, which our Walter Hickey recently published, and which comes from the Bipartisan Policy Center.
It shows that there's virtually no change to any of our debt dynamic metrics as a result of these cuts. Yes, the cuts might reduce deficits by a little bit (although they might not, if the economy slows too much) but the trajectory of things is virtually identical.
Even for avowed budget cutters, the win is Pyrrhic.
As NYT/CNBC's John Harwood tweeted this morning.
Rs won lower discretionary spending levels than Obama/Dswant. But cost is greater: no entitlement reform AT ALL. Was achievable.
— John Harwood (@JohnJHarwood) March 2, 2013
It seems pretty clear that Obama is open to (at least some modest) tweaks to entitlements. But to make them palatable, he wants them paired with higher taxes, which is an impossibility in this Congress.
So we got these dumb cuts that don't do anything about current debt dynamics.
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