The press has spent the last few days tallying the reasons Congress probably won’t forge the big budget deal necessary to spare the country future brinkmanship of the kind we endured last week. The reasons are familiar: John Boehner is still weak. President Obama still won’t fold. Ted Cruz still exists.
But there’s another reason, which gets less attention. Most Republicans aren’t really interested in reducing America’s debt. I know that sounds strange. After all, conservatives have spent the Obama era screaming that unless America reduces its debt, we’ll become Greece or Detroit or ancient Rome. Last week, some congressional Republicans found the prospect of raising the debt limit so horrifying that they were willing to risk a second financial crisis instead.
But ignore the rhetoric and watch what the GOP does between now and December. Last week, as part of the deal to reopen the government and raise the debt ceiling, Congress gave budget negotiators roughly two months to agree on a deficit-reduction deal. Basically, the negotiators have three options. First is to replace the “sequester”—the automatic cuts to discretionary spending that kicked in last March—with cuts to long-term “entitlement” programs such as Medicare, Medicaid, and Social Security. Second is to replace the sequester with both entitlement cuts and tax hikes. Third is to do nothing and let the sequester continue.
Republicans prefer the first option, but they can’t achieve it as long Obama remains president. He has said a thousand times that he won’t support a deficit deal that cuts entitlement spending alone, and as Republicans recently learned the hard way, Obama can’t be rolled. So the GOP’s real choice comes down to the latter two options.
If Republicans were really interested in slashing debt, they’d choose the second option in the blink of an eye, as cutting entitlements and raising taxes are a much, much better way to cut the deficit than continuing the sequester. For starters, many of the discretionary programs the sequester slashes partially pay for themselves. Last year the nation’s air traffic control system, for instance, paid for 70 percent of its own budget through user fees on airline passengers. Such fees also fund a significant chunk of the budgets of the Securities and Exchange Commission, Food Safety Inspection Service, Food and Drug Administration, National Park Service, and many other government agencies. That means when the sequester prunes these agencies’ budgets by one dollar, the government saves far less than one dollar, as those cuts also prevent the agencies from collecting the user fees that bring money in.
Even more important, sequester cuts are a lousy way of cutting the nation’s long-term debt because they’re temporary. They’re set to expire in 2021, just when the baby boom retirement sends America’s deficit skyrocketing. And as the Center for American Progress’s Michael Linden points out, they probably won’t even last until then. Unlike entitlement cuts, sequester cuts must be renewed every year by Congress, and sooner or later, Congress will likely balk. Republicans love cutting discretionary spending in the abstract, but even they can’t handle the drastic reductions the sequester demands for real programs with real constituencies. This August, for instance, Boehner scheduled a vote on a transportation bill that included sequester reductions and then scrapped it because even many Republicans refused to vote for a bill that slashed spending so deep.
The sequester represents an arbitrary, highly inefficient method of cutting the deficit in the short term. But America doesn’t need to cut the deficit in the short term because in the short term, the deficit is going down. Between now and 2015, according to the nonpartisan Congressional Budget Office, the deficit will plunge to roughly 2 percent of GDP, one-fifth its level in 2009. The problem is that after that, entitlement cuts driven by retiring baby boomers will send deficits through the roof.
If you want to tackle America’s long-term deficit without exacerbating our already epic gap between rich and poor, the second option, trimming entitlement costs while raising taxes on the wealthy, makes a lot of sense. Early this year, Obama unveiled a budget that did exactly that. He proposed replacing the sequester with cuts in Medicare, a tweak in the way Washington measures inflation so that Social Security benefits don’t rise as fast, and a rule requiring that millionaires pay at least 30 percent of their income in taxes.
But Republicans weren’t interested then and they’re not interested now. Senate Republican leader Mitch McConnell has taken to calling Obama’s tax-hike-for-entitlement-cuts proposal a “ransom” that the GOP won’t pay. McConnell also has called preserving sequester cuts “a top priority for me and my Republican colleagues.” With the exception of a few hawks such as John McCain, who are horrified by the toll the sequester is taking on defense, most Republicans seem to prefer extending the sequester to cutting any deal that boosts taxes, even if it brings substantial entitlement cuts as well.
That’s because for most Republicans, deficit reduction is a smokescreen. What they really want is “smaller” government, by which they mean government that taxes less and spends less on domestic programs. (On defense, Republican small government orthodoxy tends to wane.) Republicans want smaller government when deficits are high and when deficits are low. But when deficits are high, they pour old wine into new bottles and pretend that smaller government and deficit reduction are the same thing.
They’re not. And because today’s Republicans care far more about the former than the latter, it’s unlikely America will make much progress toward solving its long-term budget woes this fall.