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Once Again, “We’ll Fight Next Time”

By: Daniel Horowitz (Diary)  |  January 14th, 2013 at 10:05 AM  | 

RESIZE: AAA

During the fight over the FY 2011 budget in 2011, conservatives were told to stand down and wait for the debt ceiling.  At that point, “we would begin to cut trillions,” promised GOP leaders.  They wound up caving on the debt ceiling in return for nothing.  Then they said we would fight for the FY 2012 budget.  Well, once we agreed to lock in the Obama spending levels under the Budget [Out of Control] Act, we had no grounds to fight then either.

FY 2013 followed the same narrative.  We were told to shirk from a budget fight last year because we were supposed to win the election, and exert more influence later on.  Well, we lost the election, and the rest is history.  Once we lost the election, we supposedly had no leverage to fight on the tax issue, but ‘wait oh wait’ until the debt ceiling and we’ll take their lunch money.

Now there are already signs that they are going to ask conservatives to defer the fight until – you guessed it – the next CR.   Politico has their own agenda, but their observation from interviews with Boehner’s staff sounds all too familiar:

Boehner won’t say this to his members, but Republicans who know him well believe he will never allow default, even if it puts his leadership position at risk. Remember, raising the debt limit requires a House vote, so it is possible Boehner could face a choice of allowing a vote that a majority of his members would oppose, which he has promised not to do — or allowing default.

Sommers, his chief of staff, and others are searching for ways to delay that life-or-death choice or convince members that a government shutdown is sufficiently dramatic to make their stand.

The 2013 continuing appropriations resolution expires on March 27, cutting off funding for most federal agencies. It needs to be extended, and Republicans don’t want to do so unless a new continuing resolution reduces spending, too.

This is where they could choose to shut down the government to dramatize their contention that for four years Obama has promised in words to cut spending but in action only piled up debt. Many Republicans believe this is precisely what they will do.

When we come to the point that $2.1 trillion in new debt is expended in just 17 months, we have run out of time.  Instead of blithely ignoring the debt ceiling, we should lower the spending floor.

The administration and some Republicans are propagating a false choice between permanently raising the debt ceiling or defaulting on our credit.  It’s designed to create another political cliff, in the hopes of shielding their spending binge from imperative reforms.  The real answer is to lower the spending floor.

We all know that the Treasury takes in enough tax revenue to cover about 60% of the federal budget.  Only the remaining portion must be serviced by debt.  We will only default on our credit if we stop paying interest to the creditors.  Interest on our debt accounts for just 6% of the federal budget.  There’s no reason why we should not force Congress to lower the spending floor to meet the tax revenue by prioritizing our payments.  These payments would include interest on the debt, Social Security checks, wages for military personnel, and other vital programs.  The discretionary departments and welfare will just have to wait until Democrats are willing to pass something like Cut, Cap, Balance or free market entitlement reform.

Pat Toomey authored such a bill in 2011, along with RSC members in the House.  This legislation would smoke out Democrats for their duplicity on the issue of default.  They should pass the Full Faith and Credit Act now, and let Democrats go on record as opposing the only method that will responsibly avoid default while lowering the spending floor until we force through a plan that will balance the budget.

At some point, we won’t have the luxury of waiting until next time to fight for limited government.  The time to fight is now.

Cross-posted from The Madison Project

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COMMENTS

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  • bdirks

    The problem is that the government revenues you speak of don’t arrive like a big paycheck on the first of the month. It is a lumpy figure that varies from day to day, as are the amount of obligations that are due that day:

    http://www.businessinsider.com/what-will-happen-if-we-dont-raise-debt-ceiling-2013-1#the-bipartisan-policy-center-looked-at-what-will-actually-happen-if-congress-doesnt-raise-the-debt-ceiling-1

  • jackm

    I’m not quite getting what you think that Boehner and McConnell should do. It takes passage in the House and Senate and (usually) the president’s signature to make a new law.

    But suppose this law was passed. Who is going to get the heat when defense contractors or farmers or the FAA are left without funding?

    One more thing. What happens when the IRS collects $22 billion in a month and the debt service is $25 billion. The reason I ask is that tax income (and debt service) is different from month to month.

  • jackm

    So, in other words, you advocate eliminating all of the government agencies. Including the FAA and the FBI. Including Social Security Administration (which administers Medicare as well.)

    Why didn’t you just say so?

  • afreemaniii

    No one in their right mind would expect the bill to become law. The point of passing the bill is to shape the debate and show that we are not the party threatening to cause the world’s economy to implode by defaulting on our debt, the Democrats are. We’re not the party that wants take money from the senior citizens. We’re not the party that wants to turn our backs on mandatory government functions. Perhaps a real discussion could happen if the Democrat’s major talking points are taken away from them.

    Then again, I’m probably too optimistic about the American people as a whole waking up one day and understanding we are screwed and we need to do something.

  • ceili_dancer

    It’s not the full department, but programs within them. Once a program comes online in the government with baseline budgeting it already will have automatic increases.

    If they would go with the Penny plan they could get a grasp of the spending side of the ledger and control the debt.

  • fredflintlock

    ?????

  • fredflintlock

    Also, I will cop to the belief that easily 50% of the current bureaucracy would never have been, and could never have been built if Congress and DOJ had stuck to using the commerce clause as a tool for preventing States from levying fees and taxes on other States, and not as a fig leaf that gives the appearance of constitutional legitimacy to powers it never had.

    “The Commerce Clause was designed to eliminate an intense rivalry between the groups of those states that had tremendous commercial advantage as a result of their proximity to a major harbor, and those states that were not near a harbor. That disparity was the source of constant economic battles among the states. The exercise by Congress of its regulatory power has increased steadily with the growth and expansion of industry and means of transportation.”

    http://legal-dictionary.thefreedictionary.com/Commerce+Clause

  • confab

    Like I care?

    At this point, I wouldn’t miss the federal government if it dried up and blew away..

  • fredflintlock

    See how easy that was? And we haven’t even gotten started yet. Now let’s put on those eye shades and get to work.

  • Chris

    That’s a fascinating slide show. I hadn’t even thought of the effect on tax refunds, much less pell grants. Do you think colleges would start sending kids home of that particular spigot were turned off? I guess if anyone has college aged children, they should make sure the spring semester is paid for!

  • Chris

    Hah, super easy. Unfortunately, if our goal is to cut almost 40% of the budget, that gets us about 0% of the way there. It reminds me of those polls that show that the only federal expenditure that people overwhelmingly support cutting (besides the stupid stuff like the US Tropical Blue Polar Bear Blue Ribbon Commission) is foreign aid, and showing at the same time that people wildly overestimate how much we actually spend on foreign aid. The point is that you can’t painlessly balance the budget. Some people are going to have to get hurt.. its just a matter of who.

  • Sir Aaron

    Sometimes I feel like Captain Picard in First Contact:

    We’ve made too many compromises already; too many retreats. They invade our space and we fall back. They assimilate entire worlds and we fall back. Not again. The line must be drawn here! This far, no further!
    Alas, it looks like we’ll be retreating again.

  • Sir Aaron

    They can’t say because they are afraid the truth would be so unpopular that they’d get run out of office.
    Cutting Federal agencies is pretty easy over time. You simply stop hiring and close agencies and reduce others through attrition. Any new hires could have a different payroll program that doesn’t include lifetime pensions or health care (you could make it available just don’t subsidize it).
    The real problem is that welfare programs, medicare, and social security are the biggest drivers of spending. And nobody wants to cut these because the people aren’t willing to do it yet.

  • Chris

    I think we both agree that there is a lot of garbage in the federal budget (including at the Pentagon) that can be cut. In the long term, I think health care costs contribute a lot to the debt. In the short term, I think the current economic downturn is significantly responsible for the growth of welfare-type payments (as well as decreased tax revenues). Presumably, if/when the economy recovers, those payments will decrease. In the meantime.. well, even Hayek supported some sort of safety net, as a way to keep people in the ‘game’ of capitalism. It’s not like welfare recipients burn their checks to keep warm, they turn around and spend them in their local economies. It does nobody any good to have more hungry children in this country, and bankrupt adults being kicked out of their homes.

  • rbdwiggins

    Picard’s (Republican’s) motivation to fight (willingness to accept) another futile battle against the Borg (the status quo), and in the end, lose Humanity (destroy our Republic) was revenge (is fear).

    The Republican leadership should put aside their fear, accept the fact that the status quo will destroy our Republic and enable the federal bureaucracy’s auto-destruct mechanism.

  • fredflintlock

    Compassionate Conservatism was only the most recent head fake from the Republicans to try to keep the conservative vote on task while securing the coveted moderate vote. This was also another version of “we’ll fight next time”. Conservatives aren’t without compassion. We just want to know, when does the safety net become a hammock? When does public assistance cease to protect the least capable and begin to destroy jobs, thus creating a cycle of dependence? Is it wise to use the healthcare system to buy votes and create more dependence on the state? How soon do we run out of other people’s money?

    How much spending is enough to keep people from starving? “As much as it takes” is not an answer. Keynes is dead. There is no yin to the deficit yang. This administration just baked stratospheric spending levels into the next ten budgets at least, and is rewriting the rules on who controls agency budgets (central committees), all based on the fiction that “the rich” will be able to pay for it all.

    It should be instructive that many of the former Soviet Block Nations have a flat income tax now, and choose not to use the tax code to transfer wealth. They’ve been down that road, and they know it’s a dead end. The masses ran out of other people’s money.