Monday, April 11, 2011

Why the budget deal was a victory

Let's first of all remember why we had an almost shutdown over this year's budget. The Democrats controlled both houses of Congress with overwhelming majorities plus the White House last year and still somehow decided that it was preferable not to even attempt a budget for 2011. They could have, but they evaded their job. According to Charlie Rangel, it was just too much of a "political hot potato." The Republicans should mention this salient fact in every appearance. The Democrats had the votes and they punted.

So the Republicans in the House put together a budget and tried to cut spending. Sure, as the WSJ writes, they didn't get the level of cuts that they hoped to get in the first place.
Yes, we know, $39 billion in spending cuts for 2011 is less than the $61 billion passed by the House and shrinks the overall federal budget by only a little more than 1%. The compromise also doesn't repeal ObamaCare, kill the EPA's anticarbon rules, defund Planned Parenthood, reform the entitlement state, or part the Red Sea.

On the other hand, the Obama-Pelosi Leviathan wasn't built in a day, and it won't be cut down to size in one budget. Especially not in a fiscal year that only has six months left and with Democrats running the Senate and White House. Friday's deal cuts more spending in any single year than we can remember, $78 billion more than President Obama first proposed. Domestic discretionary spending grew by 6% in 2008, 11% in 2009 and 14% in 2010, but this year will fall by 4%. That's no small reversal.
But the entire debate was fought on conservative territory. A president who neglected to propose any cuts of his own and a Democratic Majority Leader who, a few weeks ago, was complaining that any cuts at all would be impossible, are now trumpeting the deal towards which they were dragged kicking and screaming.

The Republicans gave up on their demands on Planned Parenthood which was apparently the deal crusher for Obama. Fine. Personally, I believe that cutting Planned Parenthood was put in as a rider in order for Boehner to have a card to give up. I think it was a bluff and the Democrats fell for it. We'll never know what Boehner's negotiating plan was, but if my suspicion is correct, then he really played Obama.

Debates over the 2011 budget isn't the major battle. It is just one skirmish in what will be a long war - the struggle to bring our federal spending under control and get us off the path of unsustainablility that we are currently on. The next battle is for raising the debt ceiling. The WSJ has some good advice for GOP strategy in that battle.
Mr. Obama will marshal a parade of Wall Street and Federal Reserve worthies predicting Armageddon if the debt limit isn't raised as early as mid-May. Republicans will play into his hands of they seek to load up any debt limit increase with policies unrelated to spending and debt reduction.

The best advice we've heard is from former Senator Phil Gramm, who says Republicans should agree that families and nations should always honor their debts. But in doing so they should also make sure they won't pile up new debt. For a family, that means cutting up the credit cards. For Congress, it means passing budget reforms that impose hard and enforceable limits on new spending and debt.

We are not talking here about that hardy perennial, a balanced budget amendment to the Constitution, that would easily become a lever for Democrats to push for higher taxes. Far better would be statutory limits on spending increases and debt as a share of GDP, sequesters that automatically cut spending if Congress exceeds those limits, supermajority rules for replacing those limits, and revisions of the budget baseline so that each year's budget begins at last year's spending levels, not with automatic increases.

This is the kind of reform the public will understand is directly related to the debt limit, and one that Senate Democrats and Mr. Obama will find hard to oppose. Republicans should waste no time starting to explain their debt-limit terms, so voters also understand the GOP isn't toying with default as a political ploy.
A government shutdown over half a year's budget for this year wasn't worth it. But now that the nation's attention is on Washington and the debates over federal spending, it's time to marshal our forces for the next battles. And the Republicans can remind everyone that they are the party that tackled the necessary challenges while the Democrats are the party that decided that doing their job was too much of a "political hot potato."