Roving thoughts and provocations

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Washington’s Budget Battle: Where Is Obama?

AP Photo/Charles Dharapak
House Speaker John Boehner and Republican Majority Leader Eric Cantor speaking about repealing President Barack Obama’s health care law at a news conference on Capitol Hill in Washington, January 6, 2011

In the struggle over government spending for the current fiscal year, the Republicans have forced the White House and the Senate Democrats into a series of retreats, and the outcome is likely to reflect more what the Republicans want than the objective situation seemed to warrant at the outset. Both sides are feeling their way along in a situation with more uncertainties than usual, but this is a most unusual time in Washington. Both sides have already made miscalculations, but thus far, the House Republicans, who were not expected to play such an important role, have held the upper hand. It appears that House Speaker John Boehner, at first taken aback by the rebelliousness of the Tea Party-backed members of his flock is now using them as leverage to his advantage in this fight—which could also help cement his relationship with them. The absence of leadership from the White House—yes, we’re back to that—has left Senate Democrats to fend for themselves, with the result that so far they have been taking a more passive role than the “upper body” usually does. The deal that was reached on Friday, March 4 to keep the government going until March 18 in order to avoid a shutdown simply postpones what may be further capitulations to the Tea Party-dominated House.

The White House and the Republican congressional leaders insist that they don’t want a shutdown, but they could still stumble into one, through intransigence on the part of the House Republican freshmen, or through sheer miscalculation. The Republican House adopted cuts that the they claim to amount to $100 billion, and the administration and the Democrats claim to have offered cuts of roughly $50 billion. (This whole process is replete with “fuzzy math.”) The supposed $50 billion difference would seem to be chump change in the estimated $3.5 trillion that will be spent this fiscal year. But in this appropriations fight defense spending isn’t being touched (a political decision) and curbs in entitlements will be the subject of a long future debate, so the argument is over only 12 percent of the budget—essentially just domestic discretionary programs. The two sides are also divided on a string of “riders”—amendments adopted by the House that reflect ideological urges and also cuts that would lead to the termination or crippling of major programs enacted in the last two years, when Democrats controlled the House. The president has threatened to veto the House bill. But thus far the Republicans have dominated the fight over the spending bill, and with the administration’s failing to take a clear and firm position Senate Democrats have fallen back in a series of retreats. So, whatever results from this fight will reflect more concessions by the Democrats than might have been the case had the Obama White House exercised more leadership.

Were there to be a shutdown—the White House would charge that the Republicans are being “reckless” (a word the Democrats, as instructed in their talking points, already have been throwing at the House-passed spending bill), but then Obama would be charged with playing partisan games in the interest of his reelection, and no one would look good. The Republican leaders understand that if there were a shutdown they would bear the brunt of the blame, and they have taken pains to not emulate the mistakes made by Newt Gingrich, who also came into power as speaker on a Republican victory tide, in the 1994 elections, and blundered into a shutdown in 1995 for which he bore the blame and which gave Bill Clinton a big political victory. (Gingrich, confoundingly planning a run for the White House, recently wrote in the Washington Post that the 1995 shutdown had resulted in “amazing success” and warned the house republicans that they should not become “one more promise-breaking, Washington-dominated sellout group.” Gingrich’s warning may be of little interest to the current House leaders, but it is reflective of the pressure they are under by not just the Tea Party followers, in congress and around the country, but also other conservatives who want to see the role of government reduced (except for those policies from which they benefit.) White House officials also know that, particularly given the fragile recovery, a shutdown is not in the country’s interest. Reasonable people have been assuming that reason would prevail—but this isn’t a rational situation.

The House Republican leaders figured that the 2010 election gave them a mandate to dramatically reduce the size of the government—the Republicans had succeeded in making “big government” (with the health care bill as part of that) the predominant theme of the election. But in actually trying to make severe cuts, the Republicans have brought upon themselves strong and not just partisan criticism that they are over-reaching and are risking slowing down the uncertain economic recovery. In a recent NBC/Wall Street Journal poll, more than half of the respondents said that they feared that the Republicans would go too far.

The Republican House Leadership also miscalculated by overestimating its capacity for exercising control over their radical new members. The leaders, realists and deal-makers, have had their hands full with the fifty-odd members who had run for election with the backing of the Tea Party, as well as other members of the 87-member freshman class. (This group’s strength is enhanced by the votes of some senior members who are in philosophical agreement with them.) The Tea Party House members—most of whom have never before held public office and see themselves as on a mission— pride themselves on (and were largely elected because of) the fact that they aren’t “politicians.” Politicians make compromises; Tea Party members, almost to a person, say, “I didn’t come to Washington to compromise.” And Tea Party members take their campaign promises seriously, and so are bent on doing just what they said they would do.

Having, along with a large number of other Republicans, run on a promise to repeal the new health care law, and so, though it was widely understood to be a meaningless gesture, since the Senate would never go along, they voted to repeal it. They had vowed to cut spending for the current fiscal year by $100 billion (first suggested in the Republicans’ campaign “Pledge to America” (an echo of Gingrich’s “Contract with America,” but this one unveiled in a hardware store outside Washington) on a different timetable), and after they got to Washington they brushed off their leaders’ argument that since the fiscal year was nearly half over that number had to be reduced. The leaders emerged shaken from a meeting in which they tried to persuade the freshmen to settle for a cut of $32 billion: $100 billion would be the Holy Grail.

At the outset of Obama’s second two years in office many Democrats rather patronizingly regarded the new House members as a bunch of “crazies”—though many of them had professional backgrounds and they were dead serious about their purpose—who didn’t really matter because the Democrats still controlled the White House and the Senate, and, if necessary, the President would exercise his veto. But instead the Tea Party budget-cutting agenda has dominated Washington. Obama himself has gone with the flow, beginning with a five-year freeze on domestic discretionary spending, which will in effect cut spending for some of the programs. (There’s widespread consensus here that the current deficit— $1.6 trillion and absent intervention growing— must be curbed in order to protect US credit; the issue is how to do that without choking off the recovery, not to mention getting consensus on how to curb it.) Little is heard these days of the stubbornly high unemployment or of President Obama’s shiny new theme of “winning the future.” He had to have a “narrative,” people told him, so he got himself a narrative, only to see it, at least for now, overrun by the Republicans’ agenda.

Democrats were also frightened by the 2010 elections and that, plus the lack of guidance from the White House on this appropriations fight, caused the Democratic Senate to put up faint resistance to the Tea Party-dominated House. A Democratic Senator complained to me recently, “The White House’s failure to telegraph even privately what trenches it will defend causes Senators who might stand and fight in a trench beside the President to take a maximum caution approach, with the result that we undercut each other and fall back further than necessary.” Obama’s deal with the Republicans in December on the Bush tax cuts for the wealthy “looms over this,” he said. Obama may have had good reason to yield on the tax cuts (he didn’t have the votes to kill them and he got fairly much for stimulus programs in return) but it led some Democrats to fear that they would be cut off at the knees on other issues. The Democratic senator said, “We end up at a far more conservative bottom line than necessary.” in fact, he said, “there is no bottom line.” and the Senate Democrats, who had set much store by having a clear message this year, have ended up unable to refute effectively the “cut spending” message of the Republicans. The Democrats were in a contest in which the Republicans were more skilled.

John Boehner, having at the outset of this session suffered defeats on three bills at the hands of the freshmen and others, threw open consideration of the appropriations bill, hoping that allowing the new members to “blow off steam” would give him more influence over them later. The result was four hundred amendments in a harum scarum process that resulted in a House bill that cuts at least $61 billion in spending for what remains of the current fiscal year, which through creative accounting allowed the Republicans to claim that they had cut the sacred $100 billion. But in letting his members loose, Boehner may have, if unintentionally, made reaching a final agreement on the spending bill more difficult. (Thinking ahead is not characteristic in a highly-charged political atmosphere.) Now he¹s using the results as an asset.

The proposed cuts get rid of some parts of popular programs, such as the Pell Grants, and programs benefitting the poor. The bill’s riders did everything from eliminating money for the Environmental Protection Agency to regulate greenhouse gases to defunding the implementation of the health care bill, and it took money from three agencies that were to implement the financial regulation bill. (“They didn’t attack the bill directly,” Barney Frank, one of its cosponsors, told me, “but if this bill went into effect there’d be no regulation of derivatives.”) Some of the cuts approved by the House—such as funds for Planned Parenthood, or for public broadcasting—didn’t save much money but stemmed from Republicans’ ideological agenda. The “riders” could be as challenging to negotiate as the size of the cuts.

The question of whether Boehner could deliver the votes for a compromise—normally in negotiations it’s assumed that the participants can deliver— is just one of the complications for the White House. The Republicans rejected as unsubstantiated the White House claims to have made cuts of nearly $50 billion. In fact, both parties’ claims of how much they had cut involved a certain amount of prestidigitation and magical thinking,—counting, for example, “cuts” from the President’s fiscal 2011 budget, which doesn’t actually exist since it was never adopted.

But the White House’s standing aside threw a spotlight on the wreckage that could be caused by the House bill, including estimates from at least three respected sources that it could cost hundreds of thousands of jobs. A flustered Boehner described Mark Zandi, a former McCain adviser who had said that the House bill would wipe out 700,000 jobs, as “Nancy Pelosi’s pet economist.” (This reversion to stale campaign rhetoric was telling.) The price the Democrats paid for acceding to the Republican resolution to keep the government funded for two weeks was $4 billion, it has indicated that it would to another two-week extension, bringing the total cost to $8 billion, if, as was widely assumed, a final agreement wasn’t reached within two-weeks. (Ordinarily, such “continuing resolutions” come without conditions, but most of what’s going on in Washington now is out of the ordinary.) Republican leaders planned to keep this up as long as they could, slicing away at spending through a series of continuing resolutions, and then see if they could talk the freshmen into agreeing to give up a bit of what remains of the $100 billion to be cut, with the promise that the cuts would be proposed for the next fiscal year. The White House tried to short-circuit the Republicans’ plan by sending a delegation to the Hill on the day before the existing continuing resolution was to expire, and commencing talks headed by Joe Biden.

All of this effort to reach agreement on a budget for a year that is more than half over raises real questions about the possibility of making the “grand bargain”—including entitlements and tax overhaul as well as spending cuts—that Obama and Republican leaders have talked of trying to reach. Boehner has just said that reforms in entitlement programs must be considered this spring and he offered to “lock arms” with Obama in explaining to the American people the need for entitlement cuts. But Boehner and other Republicans have also attacked Obama for not going first on this highly charged subject.

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