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FRONT PAGE CONTRIBUTOR

Boehner’s Two-Tiered Plan: Trust Without Verification

Why is Speaker Boehner abandoning Cut, Cap, and Balance for this new, so-called two-tiered plan?  In what way is this plan superior to CCB, either politically or from a policy standpoint?

If Boehner’s rationale for repudiating CCB is that it won’t pass the Senate, thus forcing the dreaded default, which will supposedly be blamed on the GOP, then how does the new plan help?  The Democrats absolutely will not pass a plan that resurrects the debt fight before the election.  Boehner’s watered down plan won’t pass muster with Democrats, unless it raises the debt limit until after the election.  So after the House passes this new plan, and the Senate summarily rejects it, we will wind up in the same predicament.  GOP leaders will still shudder with trepidation from the approaching deadline.  The only difference is that they will be forced to negotiate from a weakened position.  In other words, the new Boehner plan will be the right goal post of the ensuing negotiations, engendering an opening for Democrats to push an even worse deal.

What about the policy virtues of this plan?

Boehner’s plan is being sold as one that upholds the principles of Cut, Cap, and Balance.  The first stage of the proposal calls for $1.2 trillion in discretionary spending cuts over the next 10 years, in exchange for a $1 trillion increase in the debt ceiling.  The plan would also impose spending caps, although the exact figures are still unclear.  Finally, it would call for a vote on a balanced budget amendment by the end of the year, as a precondition for raising the debt ceiling.

The second stage, also tied to the initial agreement to raise the debt limit, would take the form of, you guessed it.. a debt commission, which would identify $1.8 trillion in additional cuts over 10 years, primarily from entitlement reform.  Upon adoption of the commission’s cuts, the debt ceiling would be raised another $1.6 trillion next year.

There is one fundamental problem with the entire plan.  Unlike the actual CCB plan, this proposal would hand the Democrat wolves the keys to the spending hen house first, while promising unverifiable and unenforceable cuts later.  The bottom line is that once we return the federal credit card to the Democrats, they will no longer have any incentive to vote for a balanced budget amendment.

Under CCB, the passage of a balanced budget amendment is a pre-condition to raising the debt limit.  Boehner’s plan would give them their candy first, as long as they agree to hold a vote on a BBA later – a vote that Republicans can force through procedural maneuvers anyway.  In other words, we would never ensure that raising the debt limit will lead to a balanced budget.  This idea is akin to the lousy deal that Boehner secured in April, in which he agreed to pass a relatively clean CR in exchange for a vapid Senate vote on Obamacare.

As for as the cuts and caps, this plan appears to rely on future congresses – that are not committed by the initial agreement – to set the caps.  The Cut, Cap, and Balance plan would consummate those caps in the initial vote.  Furthermore, it is unclear how much of the $1.2 trillion in first-step cuts would be implemented immediately.  The Ryan FY 2012 budget resolution authorizes roughly $30 billion less in discretionary spending than estimated FY 2011 outlays (about $1.019 trillion).  It is likely that this plan will still authorize more spending for FY 2012 than Ryan’s plan, and perhaps, only slightly less than FY 2011, thus obviating their leverage in the upcoming budget fight at the end of September.  Cut, Cap, and Balance would buttress Paul Ryan’s budget – the budget that we were all supposed to support – by forcing the adoption of its FY 2012 budget authority through the debt ceiling.

The second tier of the plan, the 18th debt commission, is the most problematic.  It is a double-edged sword of predictable failure.  If the commission comes up with a good deal that implements free market entitlement reform without raising taxes, Democrats won’t be compelled to vote for it.  If they come up with lousy reform, and or raise taxes, well.. the entire commission would have been a failure.  Worse, we would be forced to raise taxes by a commission of our own making, or be called out for duplicity.

John Boehner would counter that in the event that we fail to get a prudent entitlement reform plan from the commission, we would deny the Democrats their next installment – the additional $1.6 trillion debt limit increase.  The problem with this bravado is the same problem that has existed with every case of GOP budget brinkmanship.  As long as GOP leaders telegraph the message that they fear a government shutdown, Democrats will call their bluff and force yet another short-term (or even long-term) debt limit hike.  Why would anything change in 2012?

Conservative stalwarts like Jim Jordan and Jim DeMint have already categorically rejected the Boehner deal.  This should tell the rank-and-file members all they need to know.

We need policy solutions; not political plans that aren’t even politically savvy.

 

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