If you’d like a quick summary of the Boehner plan, please read my earlier post.
I support the Boehner bill and hope House Republicans will vote to pass it.
First I’ll flag what I like about the substance of the bill.
- As initially drafted it would cut spending by $850 B over the next decade. That’s not chump change. I expect this number will soon go up to $900 B – $1 T. Update: New version is $917 B in spending cuts over 10.
- It has statutory discretionary spending caps and a sequester to enforce them.
- It does not raise taxes.
- It raises the debt limit, as we must do.
It also tees up House and Senate floor votes on the Balanced Budget Amendment, but that is not my priority. A BBA would take years to enact, and we cannot wait that long to fix the underlying math problem.
I support the Boehner bill for the following reasons:
- It cuts spending and it doesn’t raise taxes. That is an improvement over current law.
- There is nothing in the bill that I dislike. That’s a rarity.
- It is better than the Reid bill, which is the next most likely alternative to become law if the Boehner bill fails.
- It tees up this battle again in 4-6 months, providing another opportunity and keeping the pressure on to cut spending.
- It creates a process that keeps our underlying fiscal policy problems front-and-center for the foreseeable future rather than punting them into 2013.
- I can see no viable alternative strategy to enact a stronger bill.
Some conservative Members of Congress are opposing the bill because they think it does not do enough. While $850 B – $1 T of spending cuts is a medium-sized deficit reduction bill relative to historic practice, I agree that it is far from sufficient to solve our underlying budget problems. In that respect it is a step in the right direction, nothing more.
I agree with the complaint that the Senate Democratic majority has abdicated its legislative responsibilities over the past two years, passing neither budget resolutions nor spending bills.
I also agree with many conservatives who complain the Administration has hid the ball on its cash and debt-management options, and I think the August 2nd deadline is a soft one. While the Administration’s public posture is one of flexibility and compromise, its negotiating approach has exacerbated conflict at every opportunity.
And I agree with the conservative complaint that, since neither the Boehner bill nor the Reid bill solve our underlying fiscal problem, neither is likely to significantly improve the chance of avoiding a downgrade by the ratings agencies. That is a huge deal for me, but other than accepting the President’s proposed tax increases (which I wouldn’t do), I don’t see any way to avoid it, so we are stuck for the moment with whatever the rating agencies decide. I will set aside my concerns with the rating agencies for another day.
If I could strengthen the Boehner bill further, my top priority would be to increase the depth and breadth of spending cuts, and especially get savings from the Big 3 entitlement programs. In the process reform world my priority would be the “Cap” portion of “Cut, Cap, and Balance.” I strongly support the 20% of GDP spending cap in that bill.
But I don’t have a viable strategy to enact such an improved bill, and, as best I can tell, neither do those conservatives who oppose the Boehner bill. I think it is a mistake to oppose a bill that improves on current law if you don’t have both a better policy and a strategy to achieve it.
First let’s establish that “Fight harder” and “Communicate your message better” are cheers rather than strategies. Cut, Cap, and Balance is a good policy, it is not a strategy. If you disagree with what Speaker Boehner is doing, present another strategic option, which is more than just a policy or a cheer.
As best I can tell, the strategy of those on the right who oppose the Boehner bill is to keep saying no to everything until, somehow, a Democratic majority Senate and the President agree to Cut, Cap, and Balance. I would happily support such a strategy if I thought it could work, so it’s important for me to detail my strategic concerns.
The “just say no until they cave” strategy is based on a concept that makes sense to me. Why should conservative House and Senate Members bend to “legislative reality” as defined by the President and Senate Democrats? Why shouldn’t it be the other way around?
The problem in this case is the implementation. The “just say no” strategy is predicated on the assumption that, if no agreement is reached, the policy and political consequences of passing the President’s August 2nd deadline will place greater relative pressure on Democrats than on Republicans, and that this pressure difference will be so great that it causes the President and Senate Democrats to accede to policies they had previously rejected.
I think this assumption is flawed for several reasons.
1. The President controls the policy levers in a cash crunch. If the debt limit were not increased and a cash crunch occurred, the President would control the mechanics of which spending gets slowed down. That gives him options to control the damage in ways that maximize his relative advantage. LBJ would have done it district-by-district.
No, we would not technically default. Team Obama would figure out which non-debt payments to slow down and how to use that to maximize pressure and blame on Republicans. Technical default has always been a scare tactic and a red herring, but the policy and political damage of other cash slowdowns can nonetheless be quite severe in the hands of someone using it to maximize his own leverage in a negotiation.
2. The President has the bully pulpit.
3. Months of conservative threats have defined who is responsible if there is a crisis in August. A few vocal conservative Members have argued for months that default isn’t so bad, that they are willing to risk a cash crunch in early August, and that they don’t believe Secretary Geithner’s August 2nd deadline. This has been quite effective. It shifted the leverage and ensuing negotiations enough so that this week only the President is talking about tax increases and he sounds odd doing so. Markets and Washington alike are afraid that conservatives might actually tempt fate and prevent a debt limit increase, and that fear has created leverage to produce the current legislative situation.
The downside of this tactic is that if the deadline passes without legislation, you can’t turn around and blame the other guy for whatever damage occurs in August. For months the President has been saying “August 2nd is a deadline,” while a vocal faction of Republicans has been saying “No, it isn’t.” If conservatives vote no, Congress does not act, and bad things happen after August 2nd, those Republicans will get the blame because they assigned it to themselves over the prior few months.
4. Conservatives are focusing on whether they can withstand the heat of such a crisis, rather than whether the President and Congressional Democrats can.
The potential negotiating advantage comes from the relative pressure applied to the two sides. A conservative / Tea Party Member may say “I am not afraid of what happens after August 2nd if there’s no legislation,” but that’s not what matters most. If the President and Congressional Democrats are not afraid of this scenario because they think they can blame Republicans for it, then the strategy provides no leverage and is worthless. I think that’s the case, especially because of reason #3.
5. Congressional Leaders of both parties cannot allow their Members to “go on vacation” with the situation unresolved.
This is a crass detail, but I think the conservative strategy of “just say no” would also require that Members of Congress stay in Washington, saying no, through August and into September. The only thing that would anger the public more than the current situation would be if Congress took a month-long vacation without enacting a law. Maybe these conservative Members are prepared to force their leaders to cancel August recess, but I haven’t heard any of them say that so far.
For all these reasons, I think the “just say no until they cave” strategy cannot provide so much greater relative pressure on the President and Senate Democrats that they would suddenly accept a bill they hate. In addition, the strategy poses significant downside policy risk as well as political risk for Republicans. Nobody really knows what August would look like in the scenario in which Congress fails to act, and tiny-probability-really-bad outcomes become moderate-probability-really-bad outcomes. I would be willing to weigh that cost against the strategic benefit of getting a huge policy victory, but only if there were a strategy I thought could work. Without it, you are just taking unnecessary and dangerous risks with no benefit.
The Boehner bill cuts spending and doesn’t raise taxes. I hope House Republicans decide to support the Boehner bill, lock in those spending cuts, and then go for more in the next round.