Can the Ryan plan rescue Republicans?

July 13, 2011

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!”








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I doubt you noticed this, but A) People hate the Ryan plan because it’s terrible, and B) The Ryan plan spells out large cuts to Medicaid and Medicare, but the rest is just arbitrary cuts and caps like the ones cited here that bear no relation to our national priorities, smart policy thinking, or what is politically possible.

But good try anyway, Jimmy P.

Posted by tfstevenson | Report as abusive

The Ryan plan is, in fact, terrible. McConnell is right, though. The current Republican trajectory is for a total meltdown of our economy and the Party. They had an absolutely super deal from Obama and blew it. McConnell is running with his tail between his legs because of these ultra-righties. We should all be scared.

Posted by zenduane | Report as abusive

Ed,Chris,Keith…MSNBC interns..Whatever!!..Stop stating things that aren’t true,thanks! Pelosi talking point cannot and will not work. A “Super deal” from Obama? Huh?

It Must be those bright Mercury-filled GE lights and the cheap hairspray you two are using! It’s hilarious at best.

James,Your point is very valid and accurate! Thanks!

Posted by billmcmicheals | Report as abusive

Seriously, why does Reuters have such an unmitigated political hack writing for them? Every time Pethokoukis calls the Ryan Plan “bold and visionary,” he reminds people that he’s just a journalist pretending to be a policy wonk, with no real expertise or grasp of the substantive issues to speak of. It’s undermining Reuters’ credibility with market participants.

Posted by Than | Report as abusive

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.

Posted by Shiva_L | Report as abusive