A Bad Budget Deal Compared to What?

A Bad Budget Deal Compared to What?
December 13, 2013

Ross Kaminsky

Ross Kaminsky received his Bachelor's degree from Columbia University in 1987 before embarking on... (read full bio)

I’m in a tough spot. Paul Ryan is one of the brightest stars in the Republican Party. He is a true fiscal (and social) conservative, and I cheered when Mitt Romney selected him as his running mate (although I wished Ryan rather than Romney were the presidential candidate, and I still hope he will be in the future). Ryan towers, literally and figuratively, over his Democratic opposition-turned-collaborators.

But the Bipartisan Budget Act of 2013 announced Tuesday, negotiated almost entirely between Mr. Ryan and Senate Budget Committee Chairwoman Patty Murray (D-WA), is so disappointing — so far from what I’m sure Ryan himself would really want — that it’s difficult to support.

However, after due consideration, despite the opposition of organizations such as FreedomWorks which I support and respect (and which John Boehner excoriated on Wednesday), skeptical that it will lower the deficit, and with at least as much consideration to the politics as to the economics, I find myself grudgingly in favor of the deal, again as I suspect Paul Ryan feels.

The deal partially undoes the sequester which, even if stumbled into unwillingly by all involved, represents the most successful federal spending restraint in recent memory. The restored cuts will go, for Republicans and appropriators, to defense spending and, for Democrats and appropriators, to redistribution and pork that politicians euphemistically call “investments,” which they will hide behind human shields of sick children by repeatedly claiming how much they’re funneling into medical research.

Undoing the sequester, even if just for two years (and who really believes they won’t undo more of it in subsequent years as well, especially if the GOP doesn’t take back the Senate next year?), is a high price to pay for a deal.

It is also unwise, though not unexpected, to try to offset spending increases with higher fees on airline tickets, as if those who are traveling are responsible for out-of-control entitlements and even-more-out-of-control congressional appropriators who never met a vote they didn’t want to buy with someone else’s money.

The deal also uses a couple of gimmicks: It counts as savings canceling “a portion of the unobligated balances” in two large federal Forfeiture Funds (belonging to the DoJ and Treasury), as if money that likely would never have been spent should now magically count as deficit reduction.

Also, there are fraud-reduction provisions that should already have been in place simply in the interest of good government rather than being used to lessen the apparent cost of spending increases.

There are positive aspects to the deal:

  • Newly-hired federal employees will be required to contribute slightly more to their own pensions.
  • Private companies will contribute slightly more to have their retirement plans backed by the federal Pension Benefit Guaranty Corporation.
  • Despite Nancy Pelosi’s original threats to oppose any deal that does not include extension of unemployment benefits, the deal does not include them. Some conservative House members may tell Speaker of the House John Boehner that the price of their support is his promise not to bring up a separate bill to extend the already overgenerous 99 weeks of unemployment “compensation,” as politicians these days like to term that particular form of redistribution.
  • There are no increases in income tax rates. This, despite the deal’s other imperfections, allowed anti-tax crusader Grover Norquist to say that the current deal is acceptable, if not optimal.

The deal does nothing about longer-term structural problems such as entitlement spending, an uncompetitive and overly complex tax code, and the fast-approaching debt limit. Addressing such thorny and divisive issues would likely have made any current deal impossible.

Some are arguing that no deal would be better than this deal; it is a refrain that you will hear from both the right and the left in coming hours and days.

And in a perfect world, or at least a world in which Republicans had more power than they have now, I would agree. But we’re not in that world.

Paul Ryan, however, lives in reality. Rep. Ryan, responding for this article, says, “I fully agree with my colleagues that we need to do more. And I think this agreement is a good first step: It reduces the deficit by $23 billion—without raising taxes—and it cuts spending in a smarter way.”

We might debate whether the deficit reduction will actually be realized, or whether that’s even the proper measure of wise fiscal policy. (It isn’t.) But what is beyond debate is that we have a Senate run by Harry Reid and a White House occupied by the most committed and radical leftist in American presidential history. Our options are limited despite declining Democrat popularity.

So with a view toward increasing Republican power (or, more precisely, lessening Democratic power since I am not a registered Republican), I suggest that the economics of this underwhelming two-year budget deal are less important than the politics.

And on the politics, Republicans and Paul Ryan have achieved a considerable victory.

This deal makes it far more difficult for President Obama, Senate Majority Leader Reid, and House Democratic Leader Pelosi to characterize Republicans as nothing more than “obstructionists.”

Indeed, it should escape nobody (but will go unmentioned by the usual media suspects) that this deal happened while — and perhaps because — President Obama was out of the country; he was narcissistically busy taking selfies at the memorial ceremony for Nelson Mandela.

In a world of asymmetrical political warfare, the benefits to the GOP of participating in a high-profile (even if not highly significant) piece of legislation with the word “Bipartisan” in its title far exceeds any such benefit to Democrats.

Similarly, it defangs Obama’s venomous attacks on Republicans as “hijacking” the country “if they don’t get 100 percent of what they want.”

In short, this goes a long way toward making the GOP look reasonable in the minds of the independent, moderate, and swing voters who truly decide our elections. It is an important accomplishment with less than a year until elections in which Republicans have a chance to regain control of the US Senate.

Finally, the most likely alternative to this deal was not a better deal but either a worse deal or no deal, the latter greasing the skids for another government shutdown, the very briar patch that Democrats are hoping rebellious Tea Party-affiliated Republicans now throw Congress into.

Yes, this budget deal does very little, for a very short time. And yes, if I were in charge, it would look very different. Indeed, if Paul Ryan were in charge, it would look very different. But I’m not, and he’s not.

So for those of you who are saying “this deal is too terrible to support” I would ask you: “compared to what?”

What better deal for Republicans do you think would have any chance of passing both houses of Congress and being signed by our Alinskyite president whose first thought is never “what is best for America?” but rather “how can I destroy my enemies?”

Many Republicans, especially in the Senate, will object to this deal. It’s hard to blame them. It’s also politically useful, reminding voters of the fundamental differences between our two major political parties and how much better a budget could be if Harry Reid didn’t rule the Senate.

But they must also be careful not to generate so much Republican opposition that Reid can intentionally cause the defeat of the bill, living as he does in the same swamp of scorched-earth political hatred that our president inhabits and believing that yet another government shutdown would yet again benefit Democrats.

On the left, Democrats have initially been strangely silent, unsure of a political winning angle. However, in developments late Wednesday, Republicans proposed (and voted in committee for) adding a short-term "doc fix," part of a ridiculous Washington tradition in which they prevent legislated cuts to physicians' Medicare payments from taking place. Democrats have reacted by saying that if Republicans want to reopen the deal to add the doc fix, then they want to include an extension of unemployment benefits.

This is, as usual, the Stupid Party finding a way to snatch defeat from the jaws of victory. Republicans have as good a deal as possible, and threaten its success by taking on an unnecessary additional issue. (After all, what better way to increase public antipathy toward Obamacare and government control of health care than to leave the SGR along with Obamacare's additional cuts to doctors in place?)

I submit to you that there was, and is, no substantially better deal to be had in the current situation than that worked out by Paul Ryan. While the economics of the Bipartisan Budget Act of 2013 leave much to be desired, they could have been worse. Much worse.

More importantly, this deal is a significant political win for a Republican Party desperately in need of one, especially as repeated Democratic lies and failures and scandals open enormous electoral opportunities in 2014.

So when a well-meaning Tea Party activist or politician tells you that this deal is simply too bad to support, I encourage you to ask him “compared to what?"

[First published at the American Spectator.]

Ross Kaminsky

Ross Kaminsky received his Bachelor's degree from Columbia University in 1987 before embarking on... (read full bio)