StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



GOP Going Back On Budget Deal Is Ridiculous, Infuriating

13 Mar 2012
Posted by Stan Collender

My column from today's Roll Call explains why "ridiculous' and "infuriating" are two of the milder words you might want to use when you think about the latest House GOP plans to abandon the deal it agreed to in August and try to use the fiscal 2013 budget resolution to cut appropriations even more.

In case you're wondering, This and they are not going to come even close to being successful.

 

Tea Party Budget Plans Don’t Make Political Sense

The big federal budget news from last week was that, pushed by their tea party wing, House Republicans were seriously considering a fiscal 2013 budget resolution that proposed to cut appropriations below the levels agreed to last August in the Budget Control Act.

What I’m about to say almost certainly will be immediately and repeatedly quoted out of context, but it’s important to note that what the House GOP is thinking about doing isn’t prevented by the BCA. That law set a ceiling rather than a floor on discretionary spending, and while it might not have been promised or anticipated, proposing changes in what was agreed to seven months ago isn’t prohibited.

The additional cuts in spending aren’t even the first proposed changes in the law. That honor goes to the drumbeat that the automatic cut in military spending triggered by the failure of the anything-but-super committee not be allowed to go into effect as scheduled on Jan. 2, 2013.

But saying that proposing additional cuts in appropriated programs is allowable isn’t the same as saying it’s advisable. On the contrary, the effort is a combination of ridiculous politics and infuriating brinkmanship that will accomplish nothing, or at least nothing positive.

In some respects, it’s not hard to understand what the tea party wing is thinking. Even if it has been covered over each time with face-saving spin, the tea party has suffered a steady series of losses on budget issues. The enacted spending cuts have been far less than their supposed line in the sand, the debt ceiling was raised in defiance of its most basic beliefs and the payroll tax cut was extended without offsetting spending cuts.

And if that wasn’t enough, 2011 ended with Speaker John Boehner (R-Ohio) openly defying his tea party wing by unilaterally deciding to extend the payroll tax cut without what it considered to be appropriate spending cuts. Because of all of this, the tea party folks need to show their voters that they are still relevant, still have clout and are still pushing for spending cuts.

There’s no better place to do this than in a budget resolution, the advisory legislation that, if adopted, puts the House on record in favor of reduced spending but doesn’t actually cut anything. That especially is the case this year because it’s looking increasingly unlikely that many (or any?) of the fiscal 2013 appropriations bills will be enacted before Election Day in November. In other words, the budget resolution may be the tea party wing’s only chance to show it still counts.

Why would Boehner agree to a budget resolution with the additional cuts?

First, he would be taking steps to protect his hold on the speakership by not slapping down a significant part of his own caucus. Second, proposing reductions from the levels approved in the deal agreed to last August might be the only budget-related debate that occurs before the elections and, therefore, is one of the few ways for the GOP to keep the issue alive this year.

In addition, Boehner will be able to appease his tea party wing now and have some additional influence with it on other matters through the year.

But because the Senate is unlikely to go along with the House, he will still be able to agree to higher levels when what now seems like an almost inevitable continuing resolution is considered in late September.

The real question is what good any of this will do.

If it adopts a budget resolution with spending levels below those agreed to last August, the House is virtually guaranteeing the Senate won’t consider a budget resolution of its own this year (something Senate Majority Leader Harry Reid has already acknowledged in any case).

In the unlikely event the Senate did move forward with a budget resolution, it would be forced to explain its differences with the House, feeding an issue that would last through the year. The better strategy for Senate Democrats would be to wait until the fiscal year begins and the House GOP has to decide whether it wants to threaten a government shutdown a month before Election Day.

The better question is what the GOP thinks it will be accomplishing politically.

Getting the reduced levels in the budget resolution but not in the appropriations bills may seem to the base like the same type of hollow victory the GOP has won on other budget issues, and it could create disappointment so close to the elections that the leadership won’t have the opportunity to explain it away.

Republicans could also anger almost everyone by being blamed for the same type of fiscal cliffhanger next October that repeatedly reduced their approval ratings last year.

So the tea-party-led effort to get a budget resolution with lower spending levels than were agreed to in August isn’t likely to actually reduce spending, and one way or another, it will anger voters. That makes “ridiculous” and “infuriating” two of the milder things that can be said about it.

How much more of this is it

How much more of this is it going to take to make people realize that you can't run a massive nation like the United States on the basis of delusion and fantasy? I am reminded of the Easter Islanders who just kept doubling down on their delusion that all they needed to do to save themselves was build yet bigger statues, thereby sealing their demise.


Shorter summary

Shorter summary: "The teabaggers have decided that the only way to preserve their political clout is to HURT the American people."


Actually the Republicans

Actually the Republicans wanted to make the payroll tax cuts PERMANENT, and were against signing a weak, Democrat backed short term extension in the beginning,and it was the Republicans that pulled it out by itself and backed the 10 month extension, which Democrats were hesitant to do because they wanted it in a package deal.


You don't want PERMANENT

So by making the payroll tax cuts permanent, you realize you're putting a much greater toll on the deficit and the debt accumulation that that entails? The point of a TEMPORARY payroll tax cut is to stimulate the economy in the short-run when it's not strong. That's what the Dems back. If you make a measure like that permanent, it defeats the entire purpose. The payroll tax will have to go up whenever the economy is undeniably on a strong footing --if you wanna preserve your SS benefits, that is.


when pigs fly...

"The payroll tax will have to go up whenever the economy is undeniably on a strong footing --if you wanna preserve your SS benefits, that is."


Real reason for the tax cut extension

Whether the payroll tax should be permanent or short-term, I can tell you that every person who manages HR/Payroll processes KNEW that the tax cut would be extended. HAD TO be extended, as a matter of fact.
Why? Because the IT systems that support payroll functions are all configured to make a change to the tax rate ONE time, at the beginning of a tax year. Remember Y2K issues? Well, every payroll person out there could have told you that choosing a time period for the tax cut that did not end with the end of the tax year virtually guaranteed that there would be a huge employer and HR industry outcry over trying to change the tax rate months into the tax year.
Talk about pressure to keep the cut - at least until the end of the year (and note, that is exactly what they did.!)




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