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POLITICS JANUARY 21, 2011

The GOP's Serious Budget Headache

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Now that Republicans in the House have beat back health care reform (or, at least, passed a repeal bill that's destined to wilt in the Senate), it’s on to the next order of business—hacking away at government spending. Plenty of them can't wait. As Arizona Rep. Jeff Flake said on Thursday, “Some of us have been anxious to start cutting for awhile.” No doubt. But the eagerness of some conservatives to cut the budget as quickly and deeply is already creating headaches for the GOP leadership.

For starters, Republicans already differ over just how much of the budget to slash this year. Here’s the problem: Last December, Democrats passed a continuing resolution to keep funding the government at current spending levels until March. Republicans want to roll back this year’s budget to FY2008 levels, which would entail about $100 billion worth of cuts. Given that the fiscal year (which began in October) is nearly half over, and seeing as how Republicans aren't planning to touch Medicare, Social Security, defense, or homeland security, reaching that goal could mean slashing federal agency budgets by as much as 30 percent this year.

That's not a tiny incision—we're well beyond “waste, fraud, and abuse” here. Democrats note that a 30 percent across-the-board cut would mean things like 8 million college students having their Pell grants pinched by an average of $1,000, or the Department of Agriculture scrapping 8,000 safety-inspection position. And some agencies could get wrenched particularly hard, since conservative allies are asking that their favorite programs get spared—the Chamber of Commerce, for one, wants highway spending left alone.

That’s why, in recent weeks, Republican House leaders have been quietly edging away from their campaign promises. After GOP aides told The New York Times that the party might have to settle for less than $100 billion in cuts this year, House budget chairman Paul Ryan went on “Today”to blame Democrats for the GOP's dicey position: “We’re halfway through the fiscal year right now, so the problem is half the spending cats are already out of the bag, and that is why that number has become compromised.” In the meantime, an original draft of a spending resolution in the House Rules Committee had language that assumed a “transition to non-security spending at FY 2008 levels”—theword “transition,” of course, providing a little extra wiggle room.

Naturally, this doesn’t sit well with hardened conservatives—or the Tea Party movement. On Thursday, the Republican Study Committee (which acts as the ideological standard-bearer for the party), fired off a sharp letter to John Boehner, the Republican Speaker of the House, warning him not to get all weak-kneed on them: “Despite the added challenge of being four months into the current fiscal year, we still must keep our $100 billion pledge to the American people.” And, at a Rules Committee hearing on Wednesday, freshman Representative Tim Scott—a Tea Party favorite—managed to scrap all that wishy-washy “transition” language in the (largely symbolic) spending resolution.

So how, exactly, do conservatives plan on cutting? On Thursday, the RSC unveiled its proposal for reducing federal spending by $2.5 trillion over the next decade. The bulk of that plan involves hand-waving about stringent future budgets from 2012 to 2021—which aren't enforceable. The real action is what would happen this year. The committee proposed $80 billion in cuts to the non-defense discretionary budget, and RSC chair Jim Jordan said another $45 billion would come from rescinding unspent stimulus money. (Democrats say the latter goal is bogus—there isn’t that much stimulus money left to take back.)

At a press conference unveiling the plan, Republicans were all grins and backslaps. “I can’t tell you how excited I am about these proposals,” beamed South Carolina freshman Mick Mulvaney. Jordan, a former wrestling coach, offered a coach-like smile of encouragement to each Republican that got up to cheer the cuts. Tom McClintock, a California Republican, even offered up a history lesson on the perils of government spending—albeit one featuring an unlikely roster of historical antagonists: “Presidents like Hoover and Roosevelt and Bush … and now Obama, who have increased government spending relative to GDP all produced or prolonged or deepened periods of economic hardship and malaise.”

They had good reason to cheer: For once, Republicans were naming specific programs to cut. Like $7.5 billion saved by halving the federal travel budget. Or the $250 million freed up by nixing economic assistance to Egypt. Or scrapping more than $1.5 billion in Amtrak subsidies and $1.27 billion in Energy Department research. (Here's a fuller list of suggestions.)

Yet even the RSC was careful to tiptoe around the fate of more popular programs. (Pell Grants? Home heating-oil assistance?) And for good reason: Republicans may not lose sleep over scuttling, say, the union-friendly Bacon-Davis Act (an RSC proposal that would lead to $1 billion per year in savings). But what happens when NASA’s budget gets ripped apart? Republicans in Texas, Florida, and Alabama, where NASA offices and facilities are concentrated, may not be overly thrilled. Or how about when subsidies for flights to remote parts of the country get squeezed 30 percent? Rural lawmakers get ornery. Squabbles like these ended up sinking GOP attempts to cut spending in the early 2000s. As one former appropriations aide told FoxNews, “It’s the little stuff that everybody fights the hardest about.”

So it’s no wonder that even the cut-happy vanguard at the RSC presser got defensive the more they were questioned about the cuts. After a query about the $1.39 billion proposed cut to the USAID budget—because didn’t Defense Secretary Robert Gates recently say that foreign aid was a crucial part of national security?—Jordan said, “We have to make sure the country’s safe. … But, again, the situation is so bad, everything should be on the table.” Another concern: Wouldn’t a rapid cut in spending cause more layoffs—and thus worsen unemployment. Jordan’s airy response: “We think if you reduce federal government spending, you actually create jobs.” (Okay, but even if you believe that’s true in the long run, in the short term, that’s a lot of federal workers out on the street right while unemployment's still high.) When New Jersey’s Scott Garrett was asked if it was really so wise to cut spending for, say, the Securities and Exchange Commission, which has often claimed that it lacks the staff to regulate the financial industry properly, he just scoffed: “Don’t you find it ironic that these agencies that failed to do their job are now asking for greater authority, larger personnel, and more budget?” It wasn’t clear what the irony was.

In other words, conservatives haven't quite worked out all the kinks. And, in the meantime, Republican leaders haven’t figured out how to balance the zeal of their right flank with the the headaches involved in getting those cuts to stick. Sure, Jordan said he was “optimistic” that the GOP leadership would take up the RSC’s recommendations, and House Majority Leader Eric Cantor “applaud[ed]” the committee’s proposal. But, underneath all the happy accolades, there’s still plenty of room for ugliness.

Bradford Plumer is an associate editor at The New Republic.

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The GOP's Serious Budget Headache

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