Why do we even have sequestration?

>>> talking about the dread sequestration process that is set to happen this week. before we went to break, steve, you quoted woodrow wilson . basically $85 billion in the context of the federal budget as a whole is a relatively small amount of money and i feel like there are other people at the table that felt differently about that and then we went to break. neera, a response.

>> look, they actually are going to have a huge impact. there have been countless -- i feel like it's sort of gotten out there that we're going to have cuts to teachers, cuts to kids in pre-k, mental health counselors.

>> head start, long-term unemployment benefits, job force development and training, air traffic control .

>> and according to the congressional budget office we'll take a relatively sharp hit to gdp and economic growth . and actually what is really dumb about these particular cuts is when you look at the federal budget at large, you are actually hitting the areas that make america the most competitive. if you're thinking about long-term economic growth , these are the areas, nih research, pre-k, elementary schools , higher education , it's the things over the long term that generally have made us -- and we're actually because of these deficit hysteria, we've decided we need to hit the things that we should be most concerned about in order to achieve these things.

>> but that's the nature of sequestration. let's be really clear. i don't think anybody here is defending sequestration. the across the board nature particularly of the cuts. that's where you start getting this sort of it's going to have this effect on teachers. but if you could target it, and i've talked to people, for instance, in the pentagon . they're like give us a target, we'll hit it. give us some flexibility. and that will actually be able -- it is the nature of this mindless across-the-board cuts where every agency gets the same amount, 8 to 12% which is ridiculous.

>> the reason why we have sequestration is because republicans won't raise revenue. everyone agrees on this issue.

>> it's not only that, it's because we're fighting wars and bloating the pentagon budget .

>> that's not why we have sequestration.

>> it's why we have a crisis. it's why we have an economic crisis . if we look at afghanistan --

>> wait a minute. if we look at afghanistan for every young soldier that's there, there's about 68,000 soldiers that are there, every one of them, it costs $1 million a year. not because they make a lot of money, half of them qualify for food stamps . because of the cost of waging a war half a world away .

>> so you're agreeing deficits are driving this?

>> no, i'm saying that the wars are a huge part of why we are in crisis. if you bring home one soldier --

>> no, no --

>> wait. and move that money to real jobs, you could hire that soldier and 19 more like her at $50,000 a year, enough to support a real family in this country. that's the way we keep our country safe. cut the military budget is the best way to keep us safe.

>> there are two conversations going on, and they're completely different.

>> they're tangled on purpose actually, right? they're by design tangled.

>> first, we are coming out of the great recession, and it is called the great recession for a really good reason. it cost $20 trillion in wealth, it cost 10 million americans their jobs, it cost over 10 million europeans their job. and when they responded with austerity, it put three nations into great depression levels and the entire eurozone is back into a gratuitous recession they could have avoided. as to that recession, we do not want our fourth act of contraction, fourth act of austerity. so we've already had the 2011 act that you talked about and we had the tax cuts for the wealthy, but the biggest thing is the payroll tax , which had a devastating effect on gdp. and now we want to do a fourth thing. so, yes, cumulatively it is a big deal what we're proposing to do. we are strangling the recovery and that's insane. that's the net level. now, of course you can cut things within, but you increase spending in other areas.

>> but here's my point is that -- yes, okay. in the magical world in which we at the table of "up with chris hayes " can determine where the money goes, fine. but what's coming down the pike right now is this forced choice . and my question, i was on "the last word with howard dean " who said basically he made the following argument, that the defense budget is so bloated and has been so difficult to ratchet back, we should strike now and take this opportunity.

>> i so badly want to cut all of the fat out of the pentagon that i'm willing to do this. it's terrible. i hope we can restore some of the things. the 2% medicaid cuts don't have any effect on patient care . so it is true there are bad cuts in there from a democratic point of view but we are never again going to get a chance to cut the pentagon back. the pentagon hasn't had any significant cuts for 30 years. a lot of the money that's going to be cut is money that was not asked for by the pentagon . it was put in by bloated congress people who wanted to do stuff for people in their district. we have got to cut defense spending in this country and i'm fairly hawkish on defense but this may be our only chance.

>> let me show this graph. this is the defense spending from 1985 to 2011 with sequester. including war spending in 2013 dollars. and what you see is in real dollars the budget coming down, which is very hard to do. so i guess i'm saying is if the choice is cains or peace, you can choose austerity, an austerity that actually cuts the pentagon budget which has been very difficult to do or get out of the austerity bind and deal with the pentagon later, what do you want?

>> so shockingly it's a false choice , okay. shockingly you're binary between two extremes is a false choice . we should cut the pentagon budget , right? we at the center for american progress would cut the pentagon budget dramatically, not as much as sequestration because we do think you need a glide path . but i disagree with this premise. you are seeing on both sides much more interest in cutting the pentagon budget . but the challenge is we should be focused on economic growth . economic growth for the middle class and competitiveness over the long term. and what's wrong with sequestration is not to me in my mind the pentagon cuts, but the cuts to all the things that matter that we all argue about matter to middle class families and poor families, which is pre-k, education, learning, and research brands that drive innovation in our economy. so as a progressive -- hold on. no, no, as a progressive i say we can have a balanced approach that actually thinks about competitiveness and growth and inequality and reducing inequality over the long term. we should cut the pentagon budget but this is a dumb way to do it. and as progressives we should care about having smart strategies.

>> i think it has to do both. our strategy has to look at how to cut the military budget not just because of budgetary issues but because the wars are wrong, they're illegal --

>> they're ending. the wars of ending.

>> the drone war is expanding, it's not ending. the drone war is expanding, but outthat it's a huge component of why we don't have jobs elsewhere is that we do have so many jobs in the military, which as we know is the least effective way of hiring the most people for the most amount of money.

>> so after sequestration, you look at -- your graph showed this. even if we did the whole $500 billion, which is the ten-year target forsee confe -- for for sequestration, to me it is not as difficult to swallow that. and then secondly i agree that you're bringing up about the awfulness of sequestration. i agree. i think we all agree it is awful the way the thing is --

>> but they're not letting us do these things. it's not like you don't have a role.

>> we'll put revenue on the table. we've definitely asked -- called for additional revenue, limiting tax breaks , all sorts of things along those lines. but the senate democrats , they're talking about some of these are fictitious cuts as well. for instance, they're talking about eliminating direct payments to farmers, which is a bogus policy that was set up in 1996 , freedom to farm. it's ridiculous. but they're only getting $28 billion out of that instead of $50 million, which would be the whole boat of that because they're keeping in place other farm subsidy programs.

>> you're for reducing farm subsidies .

>> absolutely.

>> here's the grand point that has come out of this when you talk about a balanced approach. there was a pew study and they asked people what do you want to cut and this is the same thing that you find, when you ask specifically they don't want to cut anything. but there's a worrying trend over time about the american public which i think plays to what this debate is about. i want to show that graph right when