There’s Little Chance the Budget Will Be Done in 2 Weeks

Posted March 1, 2011 at 6:22pm

It is hard to write about anything these days other than the budget confrontation/showdown/negotiation/fandango. It was prudent tactically for Speaker John Boehner (Ohio) and his House Republicans to find a way to push off a real showdown on this year’s continuing resolution for a couple of weeks; the timetable was simply not there for resolving this set of issues by March 4. Coming up with a two-week fix that cut $4 billion satisfies the hard-chargers in Boehner’s caucus; having that $4 billion come largely from proposals for cuts made by the administration and Congressional Democrats satisfies them.

Now comes the hard part — actually a cascading set of hard parts. Perhaps two weeks of tough negotiations reaches a deal for the rest of the year. What are the odds of that? I would put them at 10 percent, being generous. As I wrote last week, the likelihood of a deal that would cut more than $15 billion to $20 billion from what will be a half year of the fiscal 2011 discretionary budget is itself exceedingly slim. The odds are minuscule that the tea-party-driven freshmen would accept the equivalent of 15 or 20 cents on the dollar from their pledge to cut $100 billion this year without first pushing for a confrontation. They did not come here to cave barely three months into their terms. And now, of course, they are being egged on by former Speaker Newt Gingrich (R-Ga.), who has written that the shutdowns in 1995 were great for Republicans and for the country, and nothing to fear compared with abandoning conservative principles.

One tactical option Republican leaders have kicked around is to do the two-week or short-term fix over and over, making each extension contingent on agreeing to another $2 billion to $4 billion in cuts and forcing Democrats either to accept them or shut down the government over a tiny amount relative to the whole budget.

There are three potential pitfalls with that approach. One is that the freshmen may quickly lose patience with a slow chipping way and demand stronger and quicker action. A second is that as these negotiations turn into a series of mini-confrontations stretching into the fall, they will greatly complicate everything else — including their overlap with the looming confrontation over the debt ceiling and the coming battles over appropriations for fiscal 2012.

The third is that we move from the abstract — cut $61 billion for the bloated federal budget — to a series of specific program cuts. All of a sudden, the debate is over issues like slashing the Food and Drug Administration budget by 25 percent, slashing the National Institutes of Health and the Centers for Disease Control, cutting border security guards, cutting money for infants and children’s’ feeding programs and Head Start, cutting from military recruitment and retention, cutting deeply from the programs the Institute of Peace is conducting in Afghanistan and Iraq that Gen. David Petraeus relies upon or aide to Egypt as it struggles to avoid a turn to extremism, cutting Pell Grants — and on and on.

There are two larger problems that flow from this current focus. The first is that the numbers sound relatively small — even $61 billion in cuts from a budget that is 50 times bigger, to cut a deficit that is 25 times bigger, seems piddly. But since the cuts come from one-eighth of the budget, and since they cover one-half of the year, meaning they come from one-sixteenth of the budget, the implications are huge. Non-security discretionary spending is roughly $480 billion, meaning half the year is $240 billion, meaning a $60 billion cut would be 25 percent across the board if we include everything. That would be immensely disruptive, all for piddling savings. This is the wrong debate to be having.

The second problem actually flows from the first. The debate we should be having, over the larger long-term debt problem and over how to make smart savings that preserve both a safety net and critical investments in the future, is both obscured by the current one and made more difficult to have if we end up with vicious disputes and potential shutdowns draining energy and the tiny amount of trust and goodwill that exists in the larger political process. Not to mention that the focus on cuts this year, when there is a real danger of weakening further a job-depleted struggling economy, could add immensely to our debt burden by pushing us back into recession.

Maybe the Senate “gang of six” can transcend the current dynamic and provide a framework to move beyond it. Maybe we will have a shutdown or two that lasts long enough to disrupt people’s lives and force the parties to the table this year to talk about the bigger, long-term issues that have to include defense, entitlements and taxes all at the same time. That scenario is not entirely out of the question. But the current path surely does not make it easy to achieve. It is more likely, I fear, that we change in April from confrontation over $2 billion or $4 billion to confrontation over raising the debt limit, a much more deadly risk to the American and global economy.

Norman Ornstein is a resident scholar at the American Enterprise Institute.