Obama's bad bet on the sequester strategy

Jack Lew [BHO's Chief of Staff and possibly next Treasury Sec.] said we have an idea for a trigger. And Harry Reid, the Democratic leader asked skeptically, what's the idea. And Lew said, sequestration. Reid bent down and put his head between his knees almost as if he was going to throw up or was having a heart attack. - Bob Woodward on NPR (he wrote a book about the budget battle)

http://www.npr.org/2013/02/11/171737558/republicans-push-to-rebrand-automatic-spending-cuts-as-deadline-nears
http://www.npr.org/2013/02/15/172078615/automatic-budget-cuts-near-as-democrats-gop-stand-firm

The Dems really need to read The Art of War and Game Theory stuff like this: http://artofstrategy.net/, because their strategy continues to suck! As you probably know by now, contrary to our assumptions the idea of sequestration (mandatory across-the-board budget cuts) originated in the Obama White House, from Jack Lew (and was later passed in a bipartisan vote by Congress). Their belief was the seq. would be so repugnant that even the most intransigent Republicans would agree to some tax increases to cut the deficit. Gross miscalculation! It shows they don't know the other party (or their own) very well.

Rule #1 of making good threats/punishments is to actually make sure that your threat/punishment is the absolute worst thing imaginable among your rival's plausible outcomes. Otherwise why the heck would he/she be motivated to avoid it by making a deal? Now for *sane* Republicans, the seq. is a nearly worst choice due to its harsh cuts to defense and loss of federal funds for their districts (FYI the seq. is constitutional and not a new idea, but it just has never been implemented in modern history, if ever). But the House is not totally comprised of sane, conscientious GOPers. Due to GOP-led gerrymandering, you have even more ultra-safe ultra-red districts. While the constituents there may be a mix of deficit hawks and people who might get mad about less federal dollars flowing in, their representatives have great job security and no reason to be less conservative. Much of the TP and many safe GOPers actually WANT the seq. to happen. So Obama served it up to them on a platter, and now they have all the leverage because they have no "stick" to fear from the seq. This has also caused a problem for Boehner and less-extreme GOPers (the few of them left), who may face a lot of voter (and corporate donor) ire if they let these cuts happen. It's a disaster for the Dems obviously. Yeah another lesson in punishment - make sure your idea hurts your rival more than you!

The folks in DC made matters worse by the fiscal cliff deal they crafted - which was mostly tax "increases" (and some tax breaks/pork to get the required votes - like the NASCAR and tuna industry exceptions), with no major spending cuts. That further motivates the pro-seq. crowd to stick to their guns because they haven't been appeased with major spending cuts so far. It's a cluster F.

When negotiating with folks whose #1 priority is to irrationally cut taxes and spending as much as possible, you can't scare them with spending cuts (a 3rd grader knows that). What do they fear instead - losing their jobs, losing their pay, and tax/spending INCREASES. What Obama and Lew should have done instead of proposing the seq. was to replace it with a "stick" like this: if they don't come up with a budget deal that is a mix of "reasonable" spending cuts and tax increases, then the following will happen:

- Irreversible loss of pay to Congress and their staff
- Irreversible loss of future benefits and pension
- Garnishing of their re-election funds and party PACs towards deficit reduction
- Expiration of tax cuts and maybe some tax increases
- Increases in as much legal, extra-Congressional discretionary spending as possible

That stuff should make any deficit hawk and teabagger quake in his/her boots, right? Probably a lot of that is unconstitutional, but come on, they can come up with something that could actually scare. Brinksmanship is getting you and your rival as close to oblivion as necessary in order to force a compromise. It is even more effective when you are not quite sure how close to oblivion you actually are (so you are forced to play it safer). The "stick" would be even better if the amounts of tax and spending increases was determined by a random-number-generator (over a reasonably large and painful range of #s), so there would be no way for the deficit hawks to zero in on how bad it could be. Of course it takes a lot of cojones to pull this stuff off, and there is a chance it will blow up in your face. But at least it's better than giving your rival exactly what he wants.