The Budget Deal: The $45 Billion Question
So is it a good thing, this budget deal? It’s a less bad thing than most of the bad things that have been happening on Capitol Hill over the last couple of years, so that’s progress of a sort. And to the extent that it sets spending at levels higher than the sequester did, it’s a win for liberals and others (including a few conservatives, it must be said) who want to get out from under the sequestration-imposed spending limits. The deal tops out at $1.012 trillion for 2014, a reasonable amount higher than the sequester level of $967 billion—and symbolically meaningful because it crosses that trillion threshold, which the Tea Partiers must hate. So it could be worse.
Now, the main complaint you’re going to hear about the deal is that it constitutes such small potatoes. The inside-the-Beltway group that wants a grand bargain is going to be disgusted by this budget. The Pete Peterson Foundation, the mothership of that cohort, released a harrumphing statement: “We should all welcome our lawmakers coming together on a budget agreement that would end the recent cycle of governing by crisis. But make no mistake—we still have a lot more to do to put our nation on a sustainable fiscal path.”
Of course, this only recommends the deal. “Sustainable fiscal path,” which in another world might mean the proper amount of public investment or the proper levels of taxation, in this context means only cuts to Social Security and Medicare. There may be future conditions under which Democrats should entertain such proposals, but not now, because from these House Republicans, there’s just no way they’re going to get enough in return to make any such deal respectable.
Case in point: In this deal, I’m told, nothing was done about budget loopholes. These loopholes, of course, mainly favor the wealthy and corporations. Republicans won’t go there. And that’s fine, in its way, because that’s their base. But it’s not fine, because Republicans have spent the last few years talking about how deliciously, lip-smackingly open they are to closing loopholes.
We need look no further than Rep. Paul Ryan (R-WI) himself, the chief GOP negotiator on this deal. And his running mate, Mitt Romney. Ryan’s very first Blueprint for Prosperity, or whatever he called it, and Romney’s 2012 tax plan, both proposed, as you’ll remember, gigantic cuts in the marginal personal income tax rates. (Romney was specific, Ryan was not, but the idea was the same.) Quite naturally, they were asked how they were going to pay for such massive rate cuts.
Easy, they said—we’ll close loopholes. Which ones? Well, we can’t really say right now, because you don’t want to reveal your hand, you see, to those greedy loophole-grabbers, because they’ll just start mounting their defense right now. Remember that? Romney must have said it a dozen times. Ryan said it a lot, too. When push comes to shove, they assured us, we’ll target them.
Well, this week, push came to shove, and they offered nothing. I hope dearly that George Stephanopoulos, David Gregory, and Bob Schieffer dig up some of those old clips Sunday for some amusing playback.
The cuts, the most politically significant ones anyway, are to pensions of both federal workers and ex-military—$6 billion on each. New federal employees hired as of next month will pay an additional 1.3 percent toward their pensions. On the military side, the retirees’ cost-of-living adjustment is decreased—so not a real decrease in benefits, but a reduction in the increase.
That may not sound so bad, but Democrats didn’t get anything in return for that concession on revenues. Just on spending. What the Democrats got wasn’t a whole lot, but it did bump the package over $1 trillion, and it did split the pain equally between military and domestic programs. That’s something.
But next comes the question of whether it can pass both houses of Congress. It has until January 15, and between now and then it has to be converted from negotiating principles into hard, and specific, legislation. I’d guess the Democrats will bite. But what about the House Republicans?
Emotionally, this is a lot like the Iran situation. There’s a preliminary deal, but the longer-term arrangement has a lot more details to it and has to be approved by the serious hard-liners. Right now, the arbiters of the conventional wisdom are agreed that the Republicans under no circumstances would risk or permit another government shutdown.
They’re probably correct. But the drumbeat on the right, especially on the talk-radio right, is likely to be that this deal is a win for the big-spending Obamabots, and if that’s the message, then support in the GOP House could vaporize pretty quickly. January 15 is a long way away. Will the hard right risk another shutdown over $45 billion? That is going to be the question. Don’t believe—yet—anyone who tells you they know the answer.