"Stop Us Before We Spend Again?"

To a cynic, it looks like a ploy. After dramatically raising spending and cutting taxes over the last 3 three years, Republicans are now touting fiscal discipline.

Yesterday, the Republican Study Committee (a very conservative group) and the Tuesday Group of moderate House Republicans issued a 12 point proposal to change the budget process, so spending would be easier to control in the future (if Congress musters the will).

It's too early to comment on the proposals themselves. But it's not too soon to speculate on what this statement really represents.

Is it a real change of heart on spending? Or is this just a passing bit of political wind, tough talk that won't be matched by real fiscal discipline when spending and tax cutting opportunities come up later this year?

It's easy to be doubtful about the spending proclivities of Republican moderates. They'd be at risk for whiplash if they patted themselves on the back any harder over last year's bloated Medicare bill. And despite the courageous objections of Senator Voinovich and Rep. Castle and a few other hardy souls, they always seem to end up voting for the big tax cuts anyway.

Conservatives are also partially to blame for our budget woes. They certainly got the tax cuts they wanted. But now, revenues are expected to hit a 50-year low of 15.8 percent of GDP. To be fair, many RSC members opposed the Medicare bill and hold principled positions against the current spending trend.

But many conservatives want to cut only non-security, non-entitlement spending (which makes up less than 20 percent of the budget). We could cut that spending in half and still have an enormous deficit. And those tax cuts really don't pay for themselves, guys. Sorry, but that myth is just, well, a myth.

Today's Republican Party is at a crossroads. The White House and Congressional Republican leaders are trying to hold together a slim partisan majority by

1. Cutting taxes continually (to please the anti-tax crowd), and
2. Doling out pork-barrel spending and raising outlays on other popular programs (so the moderates don't get in trouble back home).

The result is huge deficit, which shows few signs of receding on its own.

But let's be optimistic. There's much to like in today's announcement. At least it shows a new concern for the fiscal situation. Hopefully, it's more than butt-covering -- maybe it signals a new resolve to address our budgetary woes.

We'll probably see more "budget process" proposals in the coming weeks. Not actual tax increases or deep spending cuts, but procedures designed to make such things more likely in the future.

This year, we shouldn't expect more than a freeze in a few programs for poor people, and maybe a slowdown in the rate of increase in other programs. Congress will probably cut a program or two that Democrats like. Maybe the transportation bill will be trimmed, or maybe not.

Congress probably won't be able to pass a budget, and will probably enact a continuing resolution (in lieu of appropriations) to get through the fall elections. There will likely be a midnight vote to raise the debt limit sometime this summer (presumably attached to a "must have" bill of some sort).

Next year, 2005, is when the budget will probably hit the fan.

After the elections, when it becomes clear that proclamations and process changes and small spending cuts aren't going to balance the budget, the discussion will get more serious. Tax increases and substantial spending cuts will be right back on the table.

But heck, proclamations and process discussions are getting 2004 off to a helpful start.

Link:
Repubican Study Committee and Republican Tuesday Group principles for budget process reform.
Centrists.Org Heritage vs. the Center on Budget -- Is Spending Too High, Or Are Revenues Too Low? (February 8, 2004)
Centrists.Org Deep Cuts in Non-Security Spending and Rapid Economic Growth Won't Balance the Budget (February 2, 2002)

Posted by Jeff Lemieux at February 12, 2004 10:41 PM