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Where This Is Headed

So … where is this whole budget process headed?

Let’s review the bidding:

  • Many conservative groups have pushed for -– at the very least -– Republican opposition to any short-or
    long-term spending bill that does not defund ObamaCare.
  • The Republican leadership balks because they do not want to get the blame for shutting down the government -– which would be shut down for the sole reason that Barack Obama refuses to sign a bill to keep it open, if the price for him is defunding the ObamaCare program which independent voters hate.
  • The Republican leadership also fears ads about cute children who starved to death because of a government shutdown –- but, of course, that can be averted by legislation to keep attractive programs open in lieu of a funding or debt limit bill.
  • Finally, the Republican leadership fears the damage to the economy –- again, a slowdown of the recovery during Barack Obama’s watch for the sole reason that Obama would rather crash the economy than defund ObamaCare. (From a Republican perspective, that’s called having all 52 cards in your hand.)

Instead, says the Republican leadership, this is only the first of a series of battles.

First, there will be the debt limit.

And why will Republicans be stronger in the battle over the debt limit than they were in the battle over the continuing resolution?

I can assure them that there will be no fewer liberal economists-for-hire crawling out of the woodwork to predict economic apocalypse if the debt limit is not raised.

So what will Republicans seek in exchange for the debt limit?

  • $61 billion (minus $10 billion) in spending cuts? Which will be compromised to $30 billion in cuts, coming out of Obama-approved “corporate welfare,” defense, and user fees that claim not to be taxes, but are. (Incidentally, the defense money will be added back on a supplemental appropriations this summer, after Saudi Arabia and Qatar break out in riots.)
  • A balanced budget constitutional amendment? And what if Obama offers you the following: “Expenditures of the Government of the United States shall not exceed Receipts in any fiscal year.”? This means a constitutionally mandated Value Added Tax, plus judicial oversight of the budget. But how are you going to explain, in a 30-second sound bite, that this is different from the “18% of GDP, subject to sequestration, with supermajority and emergency escape valves” amendment you were looking for?
  • A “grand bargain”? Frankly, Republicans don’t do “grand bargains” well. Remember TEFRA, where Reagan partially repealed Roth-Kemp, then sat around waiting for the commensurate spending cuts that never came? Or the “read-my-lips” tax increase that cost George H. W. Bush his presidency and place in history -– also only to wait for spending cuts that never came?

Do I realize that, in order to begin to balance the budget, you’re going to have to get beyond the tiny sliver consisting of domestic discretionary spending? Of course I do.

But Paul Ryan’s budget -– which he is being lured to propagate by the mainstream media -– is not going to be worth the paper it’s printed on -– particularly with a crop of Republicans who do not have enough courage to threaten to shut down the government to defund ObamaCare.

Obama -– who is currently threatened with the loss of Florida and his presidency by his own Medicare cuts -– will blast the GOP for its meaningless “senior cut” proposals. And, at that point, feckless Republicans will believe that the only political way out is to actually consummate the “grand bargain” -– which will happen only with massive tax increases which dwarf tiny entitlement cuts.

But what about the fiscal year 2012 budget? With the exception of the D.C., Legislative Branch, and Military Construction appropriations, any bill that involves any controversy will stall in the Senate. On September 30, we will be in the same position we are now -– with the entire government (or most of it) subject to a “continuing resolution.”

And, if McConnell and Boehner are not willing to risk shutting down the government now, why would they be more inclined to do so in September -– almost a year away from the elections which swept the GOP into power?

Finally, there is the Krautheimer scenario. Everything will be played out in the 2012 elections.

Let’s hope not.

If Barack Obama walks away from the budget and debt limit fights as the great bipartisan messiah who cut taxes AND slashed $30 billion from the budget, why would swing voters vote for the feckless Republicans who allowed him to get away with that?

by Michael E. Hammond, former General Counsel Senate Steering Committee 1978-89.

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