Even as both sides in the fiscal fight become more categorical in their rhetoric (with Boehner and McConnell having ruled out revenue increases for the rest of eternity and Obama now reiterating a no-hostage position on the debt limit), there are countless opinions on how it will all work out. Conservatives alternate between making the debt limit vote the Mother of All Pressure Points for their foot-stomping demand that Democrats identify ways to begin repealing the New Deal and Great Society, and urging Republicans to keep their powder dry for 2014. And progressives remain wary of Obama’s resolution in maintaining a hard line, partly because he still expresses the desire for a fiscal Grand Bargain, and partly because he’s accepted Small Bargains in the past.
As Jonathan Chait points out today, the element of the fiscal puzzle that’s not getting quite the attention it deserves is the appropriations sequester that was scheduled to go into place when 2013 began, but was delayed for two months:
Sequestration is the murkiest piece of the battlefield. It’s not clear at all what either side is willing to settle for. Both dislike the automatic cuts, but each other’s best alternative is mutually unacceptable — Obama wants to replace the sequester with a mix of higher revenue and cuts to retirement programs, while Republicans want to replace it with all cuts to social spending. In the likely event of gridlock, we don’t know if the two sides would rather just turn off the automatic cuts or let them go into effect.
That’s right. We can guess, but we just don’t know, so we don’t even know if this rather important side-issue will affect the big wheels a-turning on the fiscal front.