When Republicans took control of the House in November, it set the stage for a brawl with Democrats over the sorry state of the federal budget. Round one — over funding the federal government for the remainder of the fiscal year — left both sides gasping as they staggered to their corners. Round two — over raising the debt limit — will be even tougher, but Republicans should come out swinging for fiscal responsibility.
In the debate over this year's budget, Republicans came out aggressively but ultimately faded. They originally promised $100 billion in cuts, then $61 billion. They finally got Democrats to go along with $38 billion in spending reductions, but the Congressional Budget Office found they would in fact amount to only $20 billion to $25 billion, with just $352 million affecting this year's budget. The deficit this year alone is expected to be $1.4 trillion, and total spending will increase to more than $3.6 trillion.
Ultimately, the last-second agreement that averted a government shutdown was probably a draw. Republicans did manage to cut something, while the Democrats prevented their cherished government programs from suffering much more than a scratch.
Now Republicans are threatening to reject an increase in the $14.3 trillion debt ceiling unless Democrats agree to substantial spending cuts or reforms that would reduce spending as a share of economic output.
The Obama administration argues that the GOP is playing a dangerous game and has called for a "clean vote" on raising the debt ceiling — i.e., one with no other policy strings attached. Treasury Secretary Tim Geithner has said that failing to increase the ceiling would cause "catastrophic economic consequences that would last for decades." Austan Goolsbee, the president's chief economic adviser, warned of "a worse financial economic crisis than anything we saw in 2008."
That's heavy stuff, but the administration is just trying to scare the public — and Republicans — into supporting the status quo: a gargantuan federal government that has promised more than it can deliver. This status quo is not sustainable without massive, ruinous tax increases that would put the nation on a course toward economic stagnation or worse.
Of course, Democrats would like the public to believe that the debt problem can be solved by forcing "the rich" to bear an even more disproportionate share of the federal tax burden. Even if that were a good idea — which it isn't — it wouldn't be enough. The revenues that would be needed to sustain the major entitlement programs — Social Security, Medicare, and Medicaid — in their current form would require more than just additional taxes on the wealthy. Throw in the approximately $1 trillion the government spends on "defense" — i.e., policing the world and protecting wealthy allies — and the picture gets even uglier.
That's why Republicans need to land some solid punches in this round. One suggestion for the GOP: Stop apologizing for spending cuts.
So far, Republicans have tried to justify their proposed cuts largely on the premise that the government is "broke." That negative posture conveys the message that cutting government spending is bad. On the contrary, taking the federal government down a few pegs would stimulate economic growth and expand individual freedom.
Instead of using the growing debt as an excuse, Republicans should package their reforms as worth undertaking even if the government had a surplus. If the GOP fails to articulate a positive message about the benefits of spending cuts and keeps leaning into the Democrats' strong hand, it could find itself on its back staring up at the lights.
This article appeared in The Philadelphia Inquirer on May 5, 2011.