04.12.2011 1

GOP Should Negotiate From Strength in 2012 Budget

By Robert Romano – When the House Appropriations Committee presented its original plan for the 2011 budget continuing resolution, it only put forward about $35 billion in cuts. The proposal went over like a lead balloon with the American people, however, and Committee Chairman Hal Rodgers had to go back to the drawing board, eventually producing $61 billion in spending cuts.

That was the proposal that passed the House, but was rejected by the Senate. Then, Senate Majority Leader Harry Reid dithered so much in the Senate that he failed to pass his own continuing resolution despite being in the majority. While negotiations were floundering, the Senate’s failure led House Speaker John Boehner to comment, “Pass the damn thing, all right?”

Finally, on April 8, Boehner and Reid reached a deal that would cut $38.5 billion out of the 2011 budget. Americans for Limited Government (ALG) President Bill Wilson commented, “Speaker Boehner is to be congratulated for forcing through more real budget cuts in the midnight deal to prevent a shutdown than even his own Appropriations Committee initially proposed.”

Although, it ought to be noted that it was in the ballpark of what Rodgers originally proposed. But because the decision was made to increase the number of cuts to $61 billion, Boehner was able to negotiate backwards until finally $38.5 billion of cuts was settled on.

Of course, all of this fell far short of the House Republican pledge to “roll back government spending to pre-stimulus, pre-bailout levels, saving us at least $100 billion in the first year alone and putting us on a path to balance the budget and pay down the debt.”

Too bad they didn’t stick to that. The key point is that if the House had passed $100 billion in real cuts when it passed its continuing resolution, Boehner might have been able to negotiate back to the $61 billion he originally passed.

Critically, Boehner also would have had wider support from the American people through the negotiating, and more unified backing from the conservative movement — because $100 billion in real cuts would have fulfilled a key campaign promise. This would have strengthened Boehner’s hand.

It is in this context that now House Budget Committee Chairman Paul Ryan has unveiled the House Republican blueprint for the 2012 budget. Sadly, it will not balance the budget any time soon.

As ALG’s Wilson noted, “It starts out with $110 billion in initial cuts when the spending caps goes into place. The fact is, by Chairman Ryan’s own numbers, the proposal will add more than $8 trillion to the gross national debt over 10 years. If $500 billion of initial cuts were made for 2012 instead of $110 billion, and then Ryan’s spending cap was implemented, instead of an average deficit of $508 billion under the proposal, the average deficit would be reduced to $130 billion, and the budget would be practically balanced by 2018.”

Commenting on the House Republican budget, Kentucky Republican Senator Rand Paul said, “What bothers me is it takes 26 years to balance. Now there are people, the Republican Study Committee in the House has come up with one that balances in seven years or eight years.” He was pointing to a proposal by Representative Jim Jordan and Scott Garrett that would balance the budget by 2020.

Senator Paul also pointed to the Senate Republican proposal to amend the Constitution, which would require a balanced budget within five years of adoption. His colleague, Senator Marco Rubio, has proposed conditioning support of an increase in the $14.294 trillion debt ceiling to passage of the amendment and other key reforms.

Certainly, it is worthy of consideration. Senator Paul is right. 26 years is an awful long time for the American people to accept a sea of red ink — and they’re not convinced that we have 26 years to continue borrowing and printing dollars to refinance the debt.

There will come a day when the debt is simply too large to be refinanced, let alone repaid. Even under the Ryan proposal, the debt will soar to $22 trillion by 2021 compared with $26 trillion under the current baseline. Is that too much? It’s hard to say what the upper limit of the United States’ ability to borrow is, but we may find out soon.

Ultimately, if they are to negotiate, House Republicans need to negotiate from strength in the 2012 budget process. Because, if they start out with $110 billion in cuts, they appear they will be lucky to get half of that.

Robert Romano is the Senior Editor of Americans for Limited Government.

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