President Obama has miscalculated both the tactical politics of the sequester and the depressive economic impact of budget cuts on the rest of his presidency. The sequester will cut economic growth in half this year. But it's now clear, one way or another, that we will get cuts in the $85 billion range that the sequester mandates this fiscal year. All that remains are the details.
Obama's miscalculation began in his fist term, with his embrace of the premise that substantial deficit cutting was both politically expected and economically necessary, and his appointment of the 2010 Bowles-Simpson Commission as the expression of that mistaken philosophy. Although the Commission's plan was never carried out, its prestige and Obama's parentage of it locked the president into a deflationary deficit reduction path.
This past week, we've seen how the Republicans took advantage of Obama's self-inflicted wound. With the March 1 deadline looming, the White House assumed that if the president gave enough publicity to the harm of pending automatic cuts, the Republicans would just cave. But the Republican leadership calculated that the ensuing political and economic damage would be worse for Obama, so they hung tough.
Obama also assumed that military cuts would be enough to move Republicans to compromise. But with two wars winding down, most Republicans decided that this year they were deficit hawks more than defense hawks.
1. The President's major continuing misjudgment has been that he could negotiate
with a domestic right-wing extremist group hell-bent on destroying him and not caring if they take the economy and country down with him: he would have better luck in , imo, negotiating with a rattling rattlesnake eighteen inches from his feet.