Is the goal to fight or to cut spending?

Is the goal to fight or to cut spending?

In today’s Wall Street Journal, Janet Hook and Damien Paletta report that FY11 appropriations broke down last week and a “showdown looms.”

While some conservatives demand a high-profile government shutdown, almost two weeks ago I suggested a different strategy:

Instead of threatening to oppose the next CR no matter what, impatient fiscal conservatives should demand that their party leaders ratchet up the the spending cuts in the next CR.  Spending cutters, pull the Republican team in your direction.  Demand $3B of spending cuts per week rather than $2B.  If policy-specific funding limitations are a priority, choose one funding limitation and insist that it be included in the next CR.  (I’d choose the EPA regs, which tend to unify Republicans and split Democrats.)  Use House Republican control of the legislative text to put the President and Leader Reid in the position where they have to choose between a little more savings and shutting down the government.  It’s hard for them to explain why $2B of savings per week is OK, but $3B per week is the end of the world.  Use that to your advantage.

I chose that $3B per week figure so that the full-year savings would exceed the $61B of cuts in H.R. 1. In this strategy, if the House passed repeated three-week CRs, with each one cutting $1B more per week than the previous one, they would in effect be ratcheting up the spending cuts by $333M per week for each of the 25 weeks left in this fiscal year.

Let’s examine a slight variant that is even more gradual than what I previously proposed. While negotiating with the President’s team and Senate Democrats, in this variant House Republicans continue to pass short-term Continuing Resolutions as long as there is not an acceptable full-year deal. In these repeated future CRs, they ratchet up the spending cuts by the paltry figure of only $100 million each week. (I previously recommended a bigger ratchet, which would turn once per CR. This is even more incremental, with smaller weekly ratchets.)

Under this new variant, as April 8th approaches House Republicans would pass another three week CR, one which cuts $2.1 B in its first week, $2.2 B in its second week, and $2.3 B in its third week. If another CR was needed after that, it would begin with $2.4 B of savings, and so on until the end of the fiscal year.

Such a tiny weekly increment would be nearly impossible for Democrats to reject. And yet if continued through the end of this fiscal year, $4.5 B of discretionary spending would be cut in the final week, that of September 23rd.

This strategy would result in an additional $82.5 B of spending cuts between April 8th and September 30th, and it poses zero additional risk for Congressional Republicans. They would maintain the high ground on spending cuts and remain on the offensive for the next six months.

Compare that to the $61 B of savings in H.R. 1, which appears to be the upper bound for savings that might be negotiated in a full-year bill. Indeed, even $61 B is too high of an estimate, since a full-year bill would cover at least a month less than when H.R. 1 was originally passed. The President’s negotiators and Senate Democrats have so far offered far less than $61 B in cuts.

I picked the +$100M/week figure to be absurdly small, so that there would be no question Republicans could continue to win the communications battle. For comparison, here is what you’d get with incremental ratchets of +$150M and +$200M per week, rather than +$100M.

Weekly incremental spending cuts Cumulative cuts between
8 April and 30 September
Savings in the last week,
of September 23
+$100 M $82.5 B $4.5 B
+$150 M $98.75 B $5.75 B
+$200 M $115 B $7 B

 

In this version of the ratchet strategy I have left out the policy-related funding limitations: precluding funding for ObamaCare, for new EPA greenhouse gas rules, for National Public Radio or for Planned Parenthood. Those are also unlikely accomplishments in a shutdown strategy. Nevertheless, as the spending cuts ratchet up over time, there would be ever-increasing pressure on Democrats to agree to a full-year bill. The price of that agreement could include a funding limitation.

On today’s Wall Street Journal editorial page, Fred Barnes writes that “Republicans are Winning the Budget Fight”:

Would a shutdown give Republicans more muscle in negotiating for cuts? Some Republicans speculate it would “clarify” the sharp differences between what Republicans are seeking and what Democrats want, prompting most Americans to side with Republicans. Maybe it would. But it might not.

If Congressional Republicans’ goal is a spending showdown with the Democrats at the O.K. Corral, then by all means push for the clarity of a shutdown.

The arithmetic shows that such public messaging clarity would cost taxpayers between $21 B and $54 B, compared to a near-zero risk, gradual ratchet of +$100 M to +$200 M per week.

For some conservatives it’s about having a public fight.

For me it’s about the money.

(photo credit: RileyOne)

Follow

Get every new post delivered to your Inbox.

Join 6,388 other followers