James Pethokoukis

Politics and policy from inside Washington

Can the Ryan plan rescue Republicans?

Jul 13, 2011 20:42 UTC

So what are Republicans, particularly those in the House, going to do? Debt ceiling deadlines are fast approaching. And many in the GOP leadership, particularly in the Senate, think the party’s anti-tax resolve will dissolve if markets start to tumble, resulting in a deal far less appetizing than any discussed during the Biden talks. Certainly no hard spending caps or structural changes to entitlements or any other of the big things on the tea party wishlist.

It now looks like somewhat of a strategic error for Republicans to have pushed for so much in exchange for a hike in the debt limit. The Obama White House seems perfectly willing to take negotiations right up to — and past – the Aug. 2 deadline because it thinks it can win the political fight. And certainly many GOP leaders agree, including Mitch McConnell who told Laura Ingraham today:

[W]e knew shutting down the government in 1995 was not going to work for us. It helped Bill Clinton get reelected. I refuse to help Barack Obama get reelected by marching Republicans into a position where we have co-ownership of a bad economy. …  What will happen is the administration will send out to 80 million Social Security recipients and to military families and they will all start attacking members of Congress. That is not a useful place to take us. And the president will have the bully pulpit to blame Republicans for all this disruption. If we go into default he will say Republicans are making the economy worse. … My first choice was to do something important for the country. But my second obligation is to my party and my conference to prevent them from being sucked into a horrible position politically that would allow the president, probably, to get reelected because we didn’t handle this difficult situation correctly.”

Not only did the GOP likely overplay its hand – Republicans control just one house of Congress, after all – but it opened the door for Obama to push for a “grand bargain” that almost resulted in agreement on a big tax increase. House Speaker John Boehner and Majority Leader Eric Cantor deserve great credit for standing firm against those tax hikes.

But perhaps it’s not too late for Republicans to salvage something significant. Stop pushing unpopular – for the moment – entitlement reform and out-year spending cuts that may never happen. (All of which will get relitigated in 2013 anyway.)

Instead, just try to sharply cut discretionary spending next year. House Budget Chairman Paul Ryan’s bold and visionary Path to Prosperity calls for non-security discretionary spending cuts of $1.8 trillion over ten years, starting with an $76 billion cut in 2012 vs. the CBO’s baseline. Those cuts would then be incorporated in the CBO baseline, helping create big savings as the years go by and an institutional bulwark against new Democratic spending plans. (As of right now, remember, the Obama White House is proposing just $2 billion in cuts for 2012.) Certainly plenty of Democrats wants to be seen as tough on spending, too, in exchange for raising the debt limit which is highly unpopular. Indeed, “just 37% of Americans favor raising the debt ceiling vs. 56% opposed, according to the July IBD/TIPP poll.”

And perhaps Republicans could go even further. The Ryan plan calls for a total of $111 billion in 2012 cuts. Up that by $1 billion and you have a slogan: “Let’s cut $112 billion in 2012!”

 

 

 

 

 

 

COMMENT

The so-called ‘big tax increases’ being talked about are actually just a return to normalcy, i.e. rolling back the ill conceived Bush tax cuts. Bush claimed his tax cuts were going to stimulate the economy so much that it would more than make up for the lost revenue. It’s the old Reagan scam; Supply side economics don’t work. If you cut taxes, you run up deficits. It happened under Reagan, it happened under Bush, and its still happening now. Besides, no one is talking about raising taxes on the poor, only people making over $250 thousand a year. So, please, before you throw around phrases like ‘big taxes increases’ like your hair is on fire, please give some perspective on the matter.

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The McConnell Plan and the GOP House

Jul 13, 2011 17:30 UTC

So just how hostile  is the GOP House toward McConnell’s new debt ceiling gambit (not to mention tax increases)?  Here are some excerpts from a chat I had early yesterday evening with a GOP Hill source with good knowledge of the caucus. I think it gives some pretty good color:

Members are really, really dug in. Even a deal with $2 trillion in cuts would be a tough sell.  Obama going on TV and repeatedly and being the champion of America’s debt crisis has resulted in members getting frustrated. They have sort of latched onto Obama’s $4-5 trillion [debt cut] number, they just don’t want to do it with tax increases. They longer Obama plays that, the more likely it is we end up not getting anything done.  It might have been possible to sell members on the [$2-2.5 trillion] deal two weeks ago but I don’t think that is the case right now.  He raised the stakes. The White House does not seem to be taking [Boehner and Cantor] at their word when they say tax increases won’t pass the House.  They think it’s a negotiating ploy.

The [McConnell plan] is shrewd but it doesn’t help the House majority. I don’t see how members could vote for that — tough enough selling them on a $2 trillion cut with no tax increases. If markets start reacting, it’s more likely Republicans  will get blamed. But even in that scenario, there would be trouble getting a tax increase through the House. Someone will blink if markets start tumbling, but I don’t see House members voting for a tax increase. If Obama puts out a detailed policy proposal, his own party will revolt against him.

But the ball is now in the House’s court. What will it do? Bill Kristol sees some options:

Plan A: They pass their optimal version of a debt ceiling increase—some version of the Cut/Cap/Balance proposal, with major domestic discretionary and entitlement spending cuts, spending caps, and at least a vote on a balanced budget amendment to the Constitution. Voting for this, like passing the Ryan budget, puts House Republicans in the position of claiming to have a serious and comprehensive governing plan

Plan B: The House (also?) passes a short-term debt ceiling increase of “only” several hundred billion dollars, accompanied by several hundred billion dollars of domestic discretionary cuts.  …

Plan C: The problem with both Plans A and B is that they do involve voting for an increase in the debt limit, which many House Republicans don’t want to do in the first place. … So why, some of them will say, ever vote for any debt ceiling increase at all? What’s in it for Republicans to be part of any process whose ultimate effect will be to authorize the federal government, under the management of President Obama, to plunge the nation ever deeper and more dangerously into debt?

One could answer that voters did send House Republicans to Washington to at least try to govern responsibly, and that Plans A and B embody such an effort. And that in voting for the Ryan budget, the House GOP has in effect voted to raise the debt ceiling. But that leads us to Plan C, which could either stand alone (i.e., one could skip Plans A and B) or be a follow-on to Plans A and B if they fail.  … House Republicans could allow Democrats to pass a no-tax-hike, no-gutting-of-defense version of a debt ceiling hike in the House. Speaker Boehner would have to round up (if I’ve done the math correctly) 48 Republican members who would agree to vote present on such a debt limit increase. The other 192 GOP members would vote no. The 193 Democrats would be welcome to vote yes and to pass the bill.

 

COMMENT

Defense is a CORE responsibility of government per the Constitution. Education, health care, Social Security, Medicare, all the various bloodsucking departments and agencies (NEA, EPA, Energy, most cabinet positions/depts., etc., ARE NOT. Make cuts in defense but only if making commensurate cuts in all other areas. And survival of the republic likely will require defunding and abolishing most of the Death Star size of the socialist state created in the past 80+ years.

Your entire dogma is crumbling and you along with it, Unsympathetic. I was probably far more lefty than you for 26 years. It’s a fraud and a nihilistic way to live, and its endgame is elimination of humanity. But none of you is willing to live in reality and SEE what you are doing. We are.

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