Politics

We’re Tackling Trillions Now

By From the June 2011 issue

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Political leaders and movement activists need bifocal vision. It is necessary to be able to look up along the path while also looking down at one's feet as they take small steps toward the goal, so that one doesn't trip and fall short of the horizon. We recognize this as common sense, and it shows up in aphorisms: "A journey of a thousand miles begins with a single step," "leg over leg the dog got to Dover," and "taking the entire salami a slice at a time."

Yet on March 15, claiming that the measure wouldn't cut spending fast enough, 54 House Republicans voted against a three-week continuing resolution that reduced the 2011 budget by $6 billion. Because those reductions came out of the budget baseline, the bill would have meant a $60 billion cut over the next decade. Those 54 Republicans were joined by Heritage Action and the Club for Growth, which announced they would rate a vote to cut the budget by $6 billion as a bad vote on the report cards they send out to members.

In the past 10 years, budgets in Washington grew under Bush from $1.863 trillion in 2001 to $2.983 trillion in 2008, and then went into warp speed under Obama, climbing to $3.518 trillion in 2009 and $3.456 trillion in 2010. Obama's fiscal year 2011 budget is projected to be $3.8 trillion, almost a full trillion more than Bush's last budget. How could a small cut in the 2011 budget be seen as the wrong thing to do?

When the Republicans won a net gain of 63 members of the House, giving them a solid majority of 242-24 more than the constitutional majority of 218-they had for the first time in history a Reagan Republican majority. The 1995 Gingrich-led majority of 230 was a partisan majority, but not a conservative one. Today's majority was elected with the energy and enthusiasm of the Tea Party ringing in their ears, the sense that "they" had been given a second chance after the dual failures to limit spending during the GOP majority of 1995-2006 and the entire Bush presidency, and a belief that the country, and perhaps history, was with them and not Obama. The 2010 election was about a grand goal of returning to smaller, constitutionally limited government. But Obama was still the president. He held the veto pen. He was as dedicated to increasing government spending as the Tea Party was to reducing the same. And Harry Reid had 53 Democratic votes in the Senate.

Republicans had a clear goal: to shrink government. They had the vision thing down pat. They did not have power, though. Speaker John Boehner had a two-track strategy. Pass bills that showed America where the Republicans wanted to go in the House-understanding that Harry Reid would not allow a similar vote in the Senate and that Obama would certainly veto such legislation if it did pass both houses. The House voted 245 to 189 on January 19 to repeal Obamacare in its entirety. Every Republican voted for repeal, along with three Democrats. And because the Democrats had never actually passed a 2011 budget, House Republicans voted for a continuing resolution that would cut $61 billion from the 2011 budget already under way to bring it down to the 2008 level for domestic discretionary spending. This had been promised in the "Pledge to America."

The Senate rejected the $61 billion in reductions for the 2011 budget, and Boehner offered to keep the government open for two weeks if the Senate and president would agree to cut $4 billion from current funding levels. Two weeks later he offered to keep the government open for three weeks if the Senate and president would agree to an additional $6 billion in cuts the House passed. The goal was to continue to creep forward slowly with cuts every two or three weeks that kept the Congress on schedule to cut $61 billion over the rest of the fiscal year, ending in September.

Radio talk-show hosts, activist groups, and eventually dozens of Republican congressmen rebelled at this "weak beer" strategy, and demanded that Boehner force a showdown and demand all $61 billion at once. After Boehner sat down with President Obama and Harry Reid, he reached a final deal that included a $38.5 billion reduction from the 2011 budget. On April 14, 59 Republicans in the House actually voted against this budget cut, objecting that it wasn't enough. After all, Obama's budget for 2011 was $3.8 trillion. The national debt had ballooned to $14 trillion. We were cutting only 1 percent of the year's total spending, and less than a tenth of a percent of the debt. Weren't we supposed to be rolling back Obama's trillions of spending? And here we were stuck cutting back last year's spending levels by only tens of billions. Even looking at the effect of the budget cuts over the course of a decade, the deal only pared back $315 billion-a number dwarfed by the size of the spending problem.

The Republican leadership and its allies argued, patiently, and sometimes not so patiently, that one ought not "make the perfect the enemy of the good." In other words, compromise means going in the right direction (less spending) more slowly than you want. It's an improvement over losing (more spending). If one is traveling from Washington, D.C., to Los Angeles, arriving in West Virginia is not treason...it is on the way to L.A. (Now should your feet get wet and you start hearing people speaking French, you have moved backward, not forward. That is losing.)

The leadership's explanations only irritated Tea Party activists around the nation, and gave radio talk-show hosts and potential Republican presidential candidates a cost-free opportunity to burnish their Tea Party street cred by belittling the slow progress against spending as unworthy of the November 2010 Republican victory. A disappointed base is an unhappy base and risks becoming a "stay at home" base during the elections.

SO HOW IS IT that everything changed in two weeks? The Boehner-Obama 2011 budget cut deal was agreed upon Friday, April 8. It limped through the House on April 14-and it turned out to be a sideshow. That's because on April 5, House Budget Committee chairman Paul Ryan of Wisconsin unveiled his 2012 budget, which included budget projections for the next decade and beyond. Ryan's budget reduced Obama's planned spending over the next 10 years by $6 trillion. It wiped out Obamacare and its spending and taxes. Unlike Obama's budget, which included $1.5 trillion in higher taxes by ending the 2001 and 2003 tax cuts for higher earners and imposing a number of taxes through the health care bill, the Ryan plan outlined a tax reform bringing the top marginal tax rate for individuals and companies to 25 percent from today's 35 percent and Obama's threatened 39.5 percent. All of a sudden Republican congressmen were looking not at their feet but at the stars. This was the long-range "vision thing." Not battling over billions, but tackling trillions.

The Ryan budget would take federal spending from today's 25 percent of the economy to 20 percent of the economy within 10 years. By 2050 federal spending would be down to 15 percent. By contrast, if nothing were done, the budget would be on autopilot to take up half of the economy by 2050.
Yet Paul Ryan's budget is not merely a Tea Party fantasy that cannot withstand the slings and arrows of the establishment press and the Chicago gang running the 2012 Obama reelection race.

Ryan's model is the successful 1996 welfare reform legislation that liberals have claimed as their own success. Heck, it was Bill Clinton's idea-after he vetoed it twice. Ryan's plan block grants the $273 billion Medicaid program, the food stamp program, and 77 other means-tested welfare programs, meaning that the funds for the programs would be sent back to the states. The federal block grant would grow at the rate of inflation and population, and no more. Governors would have the freedom to run those programs as they wished. This, along with other mandatory reforms, would save taxpayers $2.5 trillion over the next decade.

The Ryan budget would also protect and reform Medicare. Everyone over 55 would see no change in their Medicare. (Smart politics.) For those under 55, they would, beginning in 2022, be given a premium supplement allowing them to buy their own health care insurance. The grant would be the same amount that would have been spent on them that year and would increase with inflation. The idea is that giving citizens more control over their health care decisions and having spending increase with inflation, but not more, will yield significant savings over time. The budget would also realize other savings from abolishing Obamacare and reducing domestic discretionary spending to 2006 levels and freezing it there for five years. Military spending would be nicked, coming down $87 billion over 10 years.

The Ryan Path to Prosperity is the most radical and ambitious conservative agenda since...ever. There's been no previous effort of similar size or scope. And yet it received the votes of all but four Republicans in the House. (Two of them, Ron Paul and Walter Jones, thought the measure insufficiently hard-core.) House Republicans believe it politically defensible. Obama's reaction was to pretend to move in its direction but replace the included spending cuts with higher taxes by reducing "spending through the tax code"-in other words, higher taxes. Even Jon Stewart mocked this new euphemism for tax hikes. With the passage of Ryan's 2012 budget, the whining about the difference between $61 billion and $38.5 billion in the 2011 budget suddenly shifted to a conversation about how Republicans plan to cut $6 trillion in Obama spending and stop $1.5 trillion in Obama taxes over the next 10 years.

Soon we'll see the drafting of implementing legislation for the Ryan Path to Prosperity. But those appropriation bills will run up against the Senate and the White House veto. House Republican leaders will have to remember that they must have bifocal vision-seeing and articulating the end goal as well as the way through today's weeds-and communicate this to both the backbenchers in Congress and their nervous supporters across the country. 

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About the Author

Grover G. Norquist is the president of Americans for Tax Reform.