Republican negotiators are poised to win the prestigious Charlie Brown Award for Fiscal Policy sponsored by my colleague Dan Mitchell. With their 2011 Budget Control Act bearing fruit and providing spending control the last two years, Republicans are gearing up to throw it away in return for fee increases and paltry spending trims.
In theory, Republicans have the upper hand in ongoing budget talks because current law specifies that discretionary spending will be modestly reduced in 2014 to $967 billion. Republicans always claim that they are for spending restraint, and here they just need to hold firm on current-law budget caps to save serious money over time.
However, news reports indicate that the GOP may agree to spend at least $30 billion more in 2014 than budget caps specify in return for a tiny cut to federal pensions, aviation fee increases, and health provider cuts that won’t actually materialize.
That would be a worse GOP cave-in than new stories are indicating because a precedent will have been set. The next decade of savings from current-law budget caps would be in jeopardy. If Republican leaders up-end the budget caps this year, they will empower big-spending Democrats, liberal Republicans, and appropriators to completely blow up the caps in later years. We could end up spending hundreds of billions of dollars more than both parties previously agreed to.
Here comes Charlie running down the field, determined to show that he can score budget reform points and win the support of the fans. Here’s Lucy holding the ball, pretending to be on the same budget reform team, but actually not really interested in spending restraint. Will Charlie land on his behind and end up badly bruising fiscal policy for years to come?