GOP Fail: Sequester Slightly *Increased* The Deficit

Yesterday, the Office of Management and Budget released a mid-session review of the budget situation. It projected the 2013 budget deficit to be at just 4.7% of GDP, making President Obama's time in office responsible for the sharpest drop in the deficit as a percentage of GDP since the post World War II era. The deficit is down by $214 billion since the release of the president's budget. Some are crediting the sequester (across the board budget cuts) that the Republicans forced with some of that reduction, noting that $43 billion of those savings came directly from the cuts resulting from the sequester.

That rush to credit the sequester ignores another line of revision in the OMB estimate resulting directly from the sequester: reduced revenue estimates. Because of the sequester's cuts that killed some jobs and blunted pay raises for many others, this line appears in the re-estimate:


The worse revision in the economic assumptions are of course essentially entirely due to the Republican sequester (or maybe in Speaker Boehner's words, they want to only take responsibility for 98% of it), resulting in $46 billion in lost revenue, just as it reduced $43 billion in spending. In other words, the seuquester raised the deficit by a slightly greater amount than cutting it. Folks, in Washington, that is known as the Republican version of fiscal responsibility.