Commentary

Calling GOP’s Bluff

As budget negotiations enter a final stage in an effort to prevent an April 8 government shutdown, Republicans are retreating faster than the Libyan rebels. The final result is likely to be very bad news for any serious attempt to control government spending.

A little background: This year the federal government will spend about $3.8 trillion. We will run a deficit of $1.65 trillion, and later this month we will run up against the statutory limit of $14.3 trillion in debt. And that’s only the “on the books” debt. If one counts the unfunded liabilities of entitlement programs such as Social Security and Medicare, our real debt runs in excess of $119.5 trillion.

In the face of this looming tide of red ink, Republican leaders in the House originally proposed $38 billion in cuts. Faced with a rebellion by tea party­backed budget hawks, they upped their proposed cuts to $61 billion. That amounts to roughly 1.5 percent of this year’s budget. In fact it’s less than 3.5 percent of this year’s deficit. Last month alone, the federal government borrowed nearly four times as much as the Republicans have proposed cutting for the entire year.

[W]hen the day of reckoning comes, Republican cowardice will be every bit as much to blame as Democratic stubbornness.”

Meager as they are, the proposed cuts were too much for the Democrats in Congress. They warned that cutting spending by 1.5 percent would result in wholesale carnage. It was, in the endlessly repeated phrase of Sen. Chuck Schumer, D­N.Y., “extreme.”

Certainly one can quibble with the specific cuts that Republicans have proposed. Many of them have as much to do with political score settling as with sound budgeting. But rather than propose their own cuts, Democrats simply said “no.”

As a result we now find ourselves, two temporary stopgap spending measures later, facing the prospect of a government shutdown next Friday.

This apparently terrifies the Republican leadership. They are haunted by memories of 1995, when President Bill Clinton pilloried them for shutting down the government. As a result, according to news reports, they appear willing to settle for roughly $30 billion to $35 billion in budget cuts, slightly less than the GOP leadership first proposed back in January. That’s a whopping three­quarters of a percent of this year’s budget. To put that in perspective, if your household budget was $2,000, you would have to cut it by $15, roughly the price of a movie ticket and popcorn. But even this is a bit misleading, because roughly $16 billion of those cuts was already passed as part of the stopgap measures. Thus, we are talking about additional cuts of less than $20 billion.

Worse, Republicans appear ready to remove a number of policy provisions, called “riders,” from the bill. Those riders would have, for instance, prevented funding for the implementation of Obamacare. Defunding the health care bill was supposed to be one of the Republicans’ top priorities. Now, it looks like they’ve folded.

This, despite the fact that the public is largely on their side. According to the latest Rasmussen poll, likely voters prefer a government shutdown over maintaining current levels of spending by a 57­31 percent margin. If you can’t stick it out with the public on your side by 26 points, how will Republicans ever make the type of really tough cuts necessary to actually balance the budget?

The Republican surrender is much bigger than just one budget bill. One of the first rules of negotiating is never to threaten to do something unless you are prepared to do it. If you’re opponent calls your bluff and you fail to follow through, you’ve lost all credibility. Think of negotiating a raise at work. You can’t threaten to quit unless you are really prepared to quit, because if the boss calls your bluff, you have lost all future leverage. That’s the position Republicans find themselves in now.

In the next few weeks, Congress will have to tackle an increase in the debt ceiling, as well as next year’s budget. Republicans will undoubtedly threaten all sorts of things unless Democrats agree to control spending. Pass a balanced budget amendment or we won’t raise the debt ceiling. Agree to a 2012 budget that cuts spending or the government will shut down this fall.

But Democrats now know it’s all a bluff. All they have to do is keep saying “no,” and eventually the Republicans will crumble. All the rest is just play acting.

In the meantime, our tide of red ink will just keep getting deeper, and the coming economic crisis will creep closer. And when the day of reckoning comes, Republican cowardice will be every bit as much to blame as Democratic stubbornness.

Michael D. Tanner is a senior fellow at the Cato Institute and author of the recent study “Bankrupt: Entitlements and the Federal Budget.”