Republicans fell for Obama’s backroom budget trap.

Dec 31, 2011
WSJ

Amid this month’s payroll tax fracas, few noticed that Congress passed a 1,200-page, $1 trillion omnibus spending bill for fiscal 2012. Maybe no one in Washington boasted because it’s a victory for spending as usual. Republicans—in the House and Senate—need a better strategy.

The news is that after accounting for last-minute unemployment insurance extensions, “emergency” spending and higher Medicare physician payments, total federal outlays are estimated to be $3.65 trillion in fiscal 2012, up slightly from $3.6 trillion in 2011. The last year has seen no major reforms in any of the big entitlement programs—Medicare, Medicaid or Social Security. Spending on food stamps alone is scheduled to reach $80 billion in 2012, more than double the amount as recently as 2007.

Republicans had promised to roll back discretionary spending to 2008 levels, to save $100 billion. But the August debt deal lowered the savings to $7 billion—or a 2012 target for appropriations of $1.043 trillion. Even that target was missed because appropriators tacked on roughly $10 billion in disaster relief—hurricanes this summer—and so the new total is $1.054 trillion. That’s $4 billion more than the 2011 baseline of $1.050 trillion, although savings from troop withdrawals in Iraq may reduce that.

What about killing programs? Well, only 28 programs out of the thousands of line-items contained in the omnibus budget were terminated. The list includes mostly minor programs such as $12.5 million spent on something called “adolescent family life,” $1.2 million for civic education, and $1.4 million for economics education (not for members of Congress).

The one major domestic program of more than $100 million that got the axe was the Energy Department loan guarantee program for the likes of Solyndra. The total domestic savings from program terminations come to less than $0.5 billion.

Meanwhile, scores of programs that have long been GOP targets survived: Amtrak, the Legal Services Corp., National Public Radio, the United Nations population program, mass transit grants, and even funding for the U.N. Climate Panel. Spending increased for many programs, such as the National Institutes of Health, the Consumer Product Safety Commission, Indian Health Service and Bureau of Land Management.

Many readers will look at all this and blame House Republicans, and there’s no doubt they failed to meet expectations. Yet believe it or not, a flat overall budget is a vast improvement over the years 2007 to 2011, when overall spending increased 32%, or $868 billion. (See the nearby table.) Voters elected a GOP House to pull the Democratic credit card, and Republicans at least stopped the blowout of the Pelosi-Obama years.

The real failure of GOP leaders is that Senate Democrats and the White House foiled Republican attempts to cut spending further. The GOP fiscal high point was the passage of Paul Ryan’s budget in the spring, with $4.5 trillion of savings over a decade, numerous program cancellations, the most ambitious entitlement reform since the GOP budget of 1995 (vetoed by Bill Clinton), and an outline for pro-growth tax reform.

From that moment on, Democrats went into a prevent defense. Senate Majority Leader Harry Reid refused to pass a comparable budget outline, a Democratic abdication that has now reached more than 900 days. Democrats offered no spending cuts or budget reforms in public. None. Instead, they attacked Mr. Ryan for daring to reform the structure of Medicare to introduce more competition, which takes some nerve after Democrats cut Medicare by $500 billion over a decade to fund ObamaCare.

As for the White House, Mr. Obama joined the assault on Mr. Ryan, but he also claimed to favor some fiscal discipline and he invited GOP leaders to work out a compromise behind closed doors. This let him posture as a spending cutter without having to make a decision on any specific budget cuts or reforms. He gulled Speaker John Boehner in particular with promises of sincerity, only to demand $1 trillion in tax increases that House Republicans could never pass without violating their own campaign promises.

This was the big GOP mistake. Mr. Boehner and Majority Leader Mitch McConnell both fell for Mr. Obama’s backroom political trap. Mr. Boehner privately insisted that Mr. Obama really wanted a deal, while Mr. McConnell, who never liked the House budget, was looking for political cover on Medicare. But whatever their motives, their strategy failed by letting Mr. Obama set the terms of debate. They failed to make Senate Democrats and the White House declare themselves in public where voters would notice.

***

There has to be a better way. Tea party expectations of major reforms were always unrealistic with Democrats controlling the Senate and White House. But that’s no reason that Republicans in Congress can’t use their power to fight for their priorities.

They need to draw contrasts with Democrats on taxes, spending, regulation and reform that at least educate the public about what’s at stake. Pick some programs and make them budget-cutting showcases. Use the savings to finance tax cuts that promote growth. Or simply vote for tax reform whether or not it is “revenue neutral” under Congress’s silly budget rules. Follow votes in the House by bringing pro-growth bills to the Senate and forcing Democrats to vote up or down, as they did with the Keystone XL pipeline.

GOP Congressional leaders will be tempted to play it safe and wait for their Presidential nominee. And inevitably the Presidential race will dominate public debate as 2012 unfolds. But before it does, Republicans need to do far more to show their own supporters and independent voters that they are the party of reform and change in Washington.

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