Marc A. Thiessen: How GOP reversed runaway spending train

09/04/2013 5:25 PM

09/04/2013 5:25 PM

As congressional Republicans prepare for their seventh budget showdown with President Obama, the Washington Post on Sunday reported the cumulative result of the six previous showdowns since 2010: The size of government is largely the same.

In 2010, the government spent $3.457 trillion, while this year it is on track to spend $3.455 trillion.

Wait, that’s less.

Granted, it’s not a lot less. But for decades, government spending has been like a runaway train – rising beginning in the 1960s, accelerating during the 2000s under President Bush and then careening to unprecedented levels during the start of the Obama administration.

Now, finally, that runaway train has been slowed, stopped and put into reverse. In 2013, “spending is projected to be down by about 5 percent from 2010, accounting for inflation,” the Post reported.

That is not an insignificant achievement.

To put it into perspective, consider what might have been: Barack Obama came into office determined to increase federal spending dramatically. His first act was to pass the largest spending bill in the history of our country, the 2009 stimulus. He promised this surge in spending would be temporary, but in truth he intended to follow it up with a second stimulus, fueled by higher taxes. And true to his profligate ways, each year he has proposed more spending than Congress has passed. Had Democrats continued to control both houses of Congress, spending likely would still be rising.

Instead, the tea party revolution of 2010 put the brakes on the spending train. The GOP takeover of the House, and the influx of fiscal hawks, killed any chance of a new stimulus and gave rise to the Budget Control Act in exchange for a debt-limit increase. House Republicans were able to use the threat of default to force a reluctant Obama to cut spending instead of increasing it.

Because of this oppositional dynamic, the cuts have been done badly. The Budget Control Act used a blunt instrument – sequestration – to mandate automatic across-the-board spending cuts if political leaders could not agree on targeted reductions (which they could not). The result: Sequestration left fat, while cutting muscle. It slashed defense spending and harmed national security. Moreover, the spending cuts have come almost exclusively from the discretionary side of the ledger, when it is mandatory programs such as Social Security, Medicare and Medicaid that account for the vast majority of out-of-control federal spending.

Still, the Budget Control Act worked. And while Obama can count a plethora of government-expanding victories – from the stimulus, to Dodd-Frank, to Obamacare, to the $620 billion in fiscal-cliff tax increases he forced Republicans to swallow this year – the GOP’s one government-reducing achievement is the Budget Control Act.

That’s the good news. Here’s the bad: With the expiration of the stimulus, and the GOP’s success in blocking a second stimulus, government spending should have dropped much further. The fact that it has not means that even the GOP Congress has effectively accepted near-stimulus spending levels as the new norm.

Of course, that is not good enough for Obama. He wants to get the spending train moving again – fueled by even more tax revenue. They only thing holding it back is the Budget Control Act – which is why Obama is looking to gut it this fall.

The president wants to renegotiate the act by wrapping a deal over next year’s spending levels into the broader debt-limit talks. Republicans should not take the bait. Thanks to the Budget Control Act, spending reductions for the next fiscal year are already set in law. The only thing to negotiate is how to make the cuts.

If Obama and Congress don’t meet the act’s caps, a second round of automatic across-the-board cuts will kick in. We will see close to $1.3 trillion in discretionary savings over the next eight years, compared with the baseline before the act’s passage. The default under current law is to cut spending, which means Republicans hold all the cards. All GOP leaders need to do is prevent Obama from watering down the act.

Instead, House Speaker John Boehner, R-Ohio, is planning to pass a short-term spending bill, which would push the spending fight into the debt-limit fight this fall. Why on earth would Republicans agree to renegotiate spending cuts they already won in exchange for one debt-limit increase as part of a deal for another debt-limit increase?

Republicans should tell the president that unless he is willing to renegotiate his victories on Obamacare and fiscal-cliff taxes, they are not willing to renegotiate their victory on the Budget Control Act. Then they can decide what else they will demand in exchange for another debt-ceiling increase in the fall in order to keep the spending train moving in reverse.

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