OMB’s Sequestration Order Proves Congress Has Given Up on Judgment

Every time the Office of Management and Budget publishes a sequestration order, Washington reaches for the same worn-out script. One side lists the programs that will suffer. The other side promises to reverse the cuts. Both sides agree that the process is flawed, and both sides quietly benefit from that flaw. What they will not say is that the order represents something far more dangerous than a bad budget. It is a signed confession that Congress has handed the most consequential power it holds to a spreadsheet inside the executive branch.

I want limited government. I want spending restraint that is deeper and more permanent than anything OMB has ever produced. But a sequestration order is not fiscal discipline. It is budget avoidance dressed up as toughness.

A confession, not a plan

Sequestration traces back to the Balanced Budget and Emergency Deficit Control Act of 1985, the law known as Gramm-Rudman-Hollings. The theory was simple enough. Congress would set deficit targets, and if it missed them, automatic across-the-board cuts would kick in. The Budget Control Act of 2011 revived the same machinery on a grander scale. A bipartisan supercommittee was supposed to recommend real deficit reduction. When it deadlocked, the sequester took effect in 2013.

The original idea was that the cuts would be so indiscriminate, so painful, that Congress would never allow them to happen. The opposite occurred. Lawmakers discovered that indiscriminate pain is anonymous pain. No member has to vote for a specific reduction. No committee has to choose between a shipyard and a study grant. The calculator does it, and every politician gets to run against the calculator.

That is not the return of fiscal sanity. It is accountability laundering.

The constitutional design

Article I, Section 9 of the Constitution says plainly that no money shall be drawn from the Treasury except in consequence of appropriations made by law. The federal budget is supposed to be the product of debate, amendment, and recorded votes by the people's representatives.

James Madison understood why this arrangement mattered. In Federalist No. 58 he called the power over the purse the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people. A weapon only works when the people holding it have to fire it. Sequestration puts the weapon into a machine.

To be fair, the order is lawful in a narrow statutory sense. Congress passed the laws that created it. The president is not seizing a new power; Congress handed it over. But that makes the problem worse, not better. The structure of the Constitution assumes that legislators will guard their authority jealously. A legislature that writes a law saying that if we cannot decide, the formula at OMB will decide for us, has abandoned the central responsibility of republican government.

We are a constitutional republic, not a pure democracy, and certainly not an administrative state on autopilot. The people are supposed to know whom to blame when money is spent and whom to reward when money is withheld. Sequestration destroys that accountability.

Why formulas fail

Here is where Friedrich Hayek's knowledge problem cuts to the heart of the matter. No central planner, and no across-the-board percentage, can know which programs are essential and which are waste. A uniform sequester treats a naval shipyard and an after-school enrichment grant as if they were interchangeable line items.

They are not.

Real budgeting demands human judgment. Is border enforcement more urgent than a new conference room at a regional agency? Is aircraft maintenance more important than a grant program that outlived its purpose a decade ago? Someone has to weigh those tradeoffs. A sequestration order refuses to do so. It spreads the reduction evenly so no one has to say that this program matters less than that one.

The result is not lean government. It is stupid government. Agencies protect their preferred projects by cutting what is operationally vital. Defense leaders warn of lost readiness while civilian agencies leave vacant positions unfilled instead of eliminating deadwood. The formula has no idea which is which, and the people who do know have every incentive to hide behind the formula's blindness.

This is not the conservative principle of limited government. Limited government is the result of deliberate choices about what the federal government should and should not do. A sequester is the refusal to choose.

The invisible costs

Henry Hazlitt taught that a good economist looks beyond the visible effect of a policy to the invisible effects on everyone over the long run. Sequestration fails that test completely.

The visible effect is a headline announcing that Washington has cut tens of billions of dollars. Politicians then claim they tightened the belt. But the invisible effect is that total federal spending often still rises, because the sequester only slows the growth of planned increases under the baseline. Under the federal government's own accounting rules, a smaller increase is recorded as a cut. In an ordinary American household, spending less than you planned to spend is not the same as spending less than you spent last year. In Washington it is treated as a triumph.

Meanwhile the true drivers of long-term debt, Social Security, Medicare, and Medicaid, are largely exempt or only lightly touched. Sequestration falls hardest on discretionary accounts such as defense, border enforcement, air traffic control, and national parks. Those are exactly the visible functions of government that voters can see and evaluate. So members get to say they cut spending while shielding the programs most in need of reform and squeezing the ones that actually provide basic services.

The formula is not a deficit reduction plan. It is a political shield.

Perverse incentives

A sequestration order creates every incentive for bad behavior. If cuts are automatic, members do not have to vote for them. If the formula hits everything equally, no one has to set priorities. If the pain is broad, each member can blame the process rather than the choice.

So we get continuing resolutions. Omnibus bills. Kicking the can. A permanent state of fiscal drift in which OMB, not Congress, becomes the de facto budget authority. The very people elected to decide what the government spends now spend their time denouncing a mechanism they created and refused to override.

Worse, the sequester becomes a bargaining chip. Leaders threaten real priorities such as readiness, air safety, and border security so that the other side caves. That is not budgeting. That is hostage-taking with the public's own money.

What real discipline looks like

I am not defending a single dollar of waste. I want cuts that are real, chosen, and owned. The path to limited government runs through the legislative process, not around it.

That means restoring regular order. Individual appropriations bills should be debated and amended in the open, with members recorded on every vote. It means ending baseline budgeting so that a slower rate of growth is not sold as a cut. It means making OMB sequestration orders unnecessary, not because Congress keeps spending, but because Congress finally does its job.

Some will say that ideal is unrealistic, that Congress cannot make those choices. That is an argument for electing different members, not for abandoning the Constitution's design.

A constitutional republic requires human beings making visible choices, not an algorithm making invisible ones. If elected officials cannot decide which programs to fund and which to cut, they should not be in office. They should not be allowed to hide behind a spreadsheet while collecting a salary for work they refuse to do.

The stakes

Every time OMB issues a sequestration order, we are told that Washington is finally getting serious about spending. The truth is the opposite. The order is a monument to a legislature that has surrendered its most essential power. It is the administrative state's version of the guillotine. Equal treatment of unlike programs satisfies a bureaucratic definition of fairness, but it is not governing.

The power of the purse belongs to the people's representatives. It is the tool by which free citizens restrain their government. When that tool is handed to an unelected calculator, the people lose more than a line item. They lose the ability to hold anyone accountable for the size and scope of the state.

If we want real fiscal discipline, we need legislators with the courage to vote for specific cuts, not a machine that cuts for them while they dodge the consequences. The Founders gave us a republic of laws and human deliberation. It is time to act like it.