Last week, the Congressional Budget Office projected that under current law, the national debt will increase, not decrease, to 77 percent of GDP within the next 10 years. This is assuming the sequester, which President Obama has called "draconian," "economically damaging," and "deep [and] indiscriminate," goes into effect March 1.
You read that right. CBO is predicting that even with $1.2 trillion in automatic spending cuts, debt held by the public will rise over time. "Deficits are projected to increase later in the coming decade ... because of the pressures of an aging population, rising healthcare costs, an expansion of federal subsidies for health insurance, and growing interest payments on federal debt," reads the official report.
Nevertheless, the White House is busy taking entitlement reforms off the table and insisting Republicans agree to raise taxes before Obama will address spending.
For once, the president is playing a losing hand.
The haggard trope that savings are best achieved with a "balanced" approach—that is, through a combination of spending cuts and tax increases—rings hollow five weeks after House Republicans cut their losses and signed onto Obama's New Year's compromise. That deal, which hiked taxes across the board but hit the wealthiest Americans hardest, included exactly zero dollars in accompanying spending cuts. Heroically, the left managed to contain its distress over the unbalanced nature of the agreement.
There is simply no reason for the GOP to accept "additional revenue," Democrats' cutesy euphemism for higher taxes, now. Spending cuts are coming. The president can work across the aisle to target those cuts more carefully, but he cannot force his opposition to trade them away for something they don't want. Unlike with the scheduled expiration of the Bush tax cuts, allowing current law to go into effect does not produce an unacceptable outcome for Republicans. Cuts from a scalpel may be preferable to cuts from a machete, but when you're $16 trillion in debt, cuts from any instrument beat none at all.
In the Washington Post last week, Charles Krauthammer urged Republicans to call Obama's bluff:
The country needs tax reform. But first it needs to rein in out-of-control spending. To succeed in doing that, Republicans must remain united under one demand: cuts with no taxes—or we will let the sequester go into effect.
Krauthammer gets it exactly right. The GOP holds the better cards. It's time to go all in.