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Important Budget Questions to Ask This Week

Although this week’s Fiscal Fitness is being published after the release Monday of the Obama administration’s fiscal 2012 budget request, the column was written the day before the president’s proposal was sent to Capitol Hill. There were, of course, both official statements and unauthorized leaks about the details prior to its release, and it wasn’t that hard to guess what was coming from the White House given the politics and mathematics of this year’s budget debate.

As far as fiscal policy is concerned, the fiscal 2012 budget request isn’t the only current federal budget development. House Republicans finally released late Friday their list of specific spending cuts for what’s left of fiscal 2011. That proposal deserves — and will get — a good deal of attention when it is debated on the House floor this week.

The House Republicans’ timing was more than a little curious. Their proposed cuts, which are significant, were revealed at what is generally considered the graveyard hour for news. Unless you’re a celebrity involved in a scandal or a dictator fleeing a country, late Friday is almost the exact moment an announcement or event is guaranteed to get the least possible amount of public attention. That’s why bad news is often held until then.

The timing may have been inadvertent — the bill was delayed earlier in the week when conservatives resoundingly rejected the original, smaller package of spending reductions recommended by Appropriations Chairman Hal Rogers (R-Ky.). But the Republicans would have gained a communications advantage by holding off until Monday because their cuts would have appeared to be on an equal footing with President Barack Obama’s budget and would have reduced the White House’s ability to dominate the news.

Here are the key questions to ask as this week’s compound budget events unfold.

What’s the vision behind the numbers?
Late last year I was very critical of the deficit reduction plan proposed by Erskine Bowles and Alan Simpson, the co-chairmen of Obama’s deficit reduction commission. The plan appeared to be nothing more than a random selection of proposals that would reach a predetermined bottom line; there was no attempt at deeper explanations. For example, the Bowles-Simpson plan proposed reducing agricultural price supports by $3 billion a year but never justified that number. There was no explanation why the reduction wasn’t higher or lower, or what it would mean for farmers or the price of food. Nothing was said about why price supports were needed at all. It was just a number with no meaning.

That same question needs to be asked of every element in both the GOP fiscal 2011 spending plan and the Obama fiscal 2012 budget request. For example, will the GOP proposal for a large cut in FBI spending mean that white-collar crime, domestic terrorism and kidnapping won’t be investigated as fully or quickly? Knowing that will be far more instructive than knowing just how many agents will be fired. It would also be good to know which FBI offices will be closed.

Will what Reagan did be enough for House Republicans? Early reports about the Obama fiscal 2012 budget say that his deficit reduction plan will be two-thirds spending cuts and one-third revenue increases, the same formula Ronald Reagan agreed to with Congressional Democrats when he was president. If true, the question is whether House Republicans, who venerate Reagan and his policies, will be willing and able to do in fiscal 2012 what he did in the 1980s.

Is anyone trying to appeal to a wider audience? Although White House budget requests are generally accepted without much change, the president’s budget usually is as much an opening bid in negotiations as it is a firm plan. This year may be different: At least on spending and revenue issues, some in Washington have now redefined compromise as being the political equivalent of collaborating with the enemy.

The question is whether the White House, House and Senate Republicans, and House and Senate Democrats will see the need to broaden their support as the budget debate continues or whether solidifying their standing with their base supporters will be the primary goal.

Is it spending or federal services? Republicans supposedly were shocked in 1995 and 1996 when, during the two government shutdowns, individuals and companies were not happy that the federal services they rely on weren’t available. The question is whether, as some believe, the situation has really changed since then. The reaction to the specific spending cuts the GOP announced Friday and those included in the Obama budget released Monday will be the best indication of whether the debate has really shifted. It will also be the best indicator of whether gridlock, stalemate and threatened or actual shutdowns on budget issues are the norm the rest of the year.

Stan Collender is a partner at Qorvis Communications and founder of the blog Capital Gains and Games. He is also the author of “The Guide to the Federal Budget.”

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