As 'Devastating' As Sequester Is, Not 'Immediate Catastrophe'

Host Rachel Martin speaks with congressional scholar Thomas Mann of the Brookings Institution about the economic and political impact of sequestration. He is the co-author of a book about political gridlock, called It's Even Worse Than It Looks.

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So, the satirical news site the Onion ran a headline this past week, and it read as follows: Obama, Congress must reach deal on budget by March 1st, and then April 1st and then April 20th and then April 28th and then May 1st and then twice a week for the next four years. Now, the Onion headline is fake, yes; those deadlines are not real, but it can be hard to tell, considering the current political climate in Washington.

Thomas Mann has followed Congress for a long time. He's a congressional scholar at the Brookings Institution here in Washington, and he says the careening from fiscal crisis to fiscal crisis has taken a toll.

THOMAS MANN: It's really quite devastating. We've come through the worst financial and economic crisis since the Great Depression in reasonably good shape. But in the course of setting up these artificial crises and insisting on immediate cuts, we've actually slowed the rate of growth. We've made job creation all the more difficult and, in general, embarrassed ourselves in front of the rest of the world.

MARTIN: Interesting though, Wall Street seems to have adapted to this "new normal." quote, unquote. But is this a good thing that Wall Street has adapted, or not a good thing?

MANN: That's a good question. Wall Street and, frankly, the bond market are responding to the fundamentals of our economy and the U.S. relative to the rest of the world. More immediately, the sequester itself is not seen as capable of disrupting the macroeconomy. The damage it does is uneven across the country and to individual Americans. It will roll out slowly over time and it will hurt us on the longer-term quest to make the kind of investments and changes we need to thrive over the long haul. But it's just not an immediate catastrophe for the overall economy.

MARTIN: What does that mean politically? I mean, it appears to be a lose-lose situation. Can you walk us through the political calculations on both sides?

MANN: Right now, Republicans believe that after taking a licking in the election and in the confrontation on the debt ceiling and the fiscal cliff that they now have the upper hand because they are saying revenues are now off the table, period. And they believe they can live with those cuts and most Americans won't be affected or hurt seriously by them, and that will strengthen their hand in the budget fights going forward. The president, the advantage he has is right now he's pretty popular, the country in general has much more confidence in him dealing with these problems than Republicans in Congress. The brand of the Republican Party has deteriorated. It probably doesn't hurt them in their safe districts where all they worry about is primary challenges from the right. But it could make it impossible for them to reclaim the White House anytime soon. So, it's a tricky gamble for them.

MARTIN: And just lastly, are you and I going to be talking in three, four months' time about budget negotiations and the president and Congress in gridlock still?

MANN: I'm sorry to report that the answer is yes, that this is going to be ugly and messy. It's going to continue for a while. I think eventually we're going to get over this but it's not going to happen anytime soon.

MARTIN: Thomas Mann is a senior fellow at the Brookings Institution. He's also the coauthor, along with Norm Ornstein, of a book about political gridlock. It's called "It's Even Worse Than It Looks." Mr. Mann, thanks so much for taking the time.

MANN: Delighted to speak with you.

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