The GOP fantasy caucus is empowering Nancy Pelosi.
Political logic and perhaps even common sense seem to be prevailing within the House GOP after Thursday's debt-ceiling vote was postponed—at least among most of the caucus. The shame is that the debt-limit absolutists have weakened Speaker John Boehner's hand in negotiating a final bill with Senate Democrats.
At the most practical level, Mr. Boehner's plan is better than the one Harry Reid supports in the Senate. This remains true of the revisions Mr. Boehner released yesterday, though the irony is that it is less credible and weaker politically than the previous version. The concession the holdouts demanded, and got—a balanced budget amendment—ensures that it cannot pass the Senate. The best but unlikely scenario is that the bill otherwise remains intact.
In the years for which claims of spending restraint are most credible—fiscal 2012 and 2013—the Boehner bill would cut $25 billion and $47 billion from the outlays that the Congressional Budget Office projected in March. Off the same baseline, the plan would cut $756 billion through 2021 in return for an initial $900 billion in new borrowing. The topline figure of $1.2 trillion in cuts that everyone cites comes by comparing the Boehner plan to CBO's "budgetary authority" estimate from January, which is far less realistic but is also the platform used in the negotiations led by Joe Biden.
Some will deride $72 billion in cuts over the next two years as nickels and dimes, and it's true it is nowhere near commensurate to the scale of the spending problem. But it's also incremental progress, which is how the American political system usually changes, and a larger real reduction in government than any time since 1995.
Associated Press
Like the hobbits in Lord of the Rings, a balanced budget amendment is also a fantasy
For comparison's sake, Paul Ryan's budget blueprint that the House passed in April would cut $74 billion in outlays over 2012-2013 and $746 billion in total over the next 10 years. Accomplishing roughly the same thing via the Boehner plan, with no new tax increases, while controlling only one-half of one branch of government, would be a major GOP achievement.
The plan also includes domestic spending caps, enforced with an automatic sequester for 10 years. Such caps could be overridden by a future Congress, but they make it harder and help to create a culture of fiscal discipline.
Another benefit is that the Boehner bill would require a second debt-limit increase of $1.6 trillion next year, with conditions. Curbing the size and growth of government is a constant struggle, and the Boehner plan creates another opening for further progress.
By contrast, the Reid plan raises the debt ceiling by $2.7 trillion now, which effectively closes off debate until after the 2012 election. All told, it cuts spending by $2.2 trillion compared to the March CBO budgetary authority baseline—though with multiple gimmicks that include $1.044 trillion in "savings" from winding down the wars in Iraq and Afghanistan that will happen anyway.
Amid this "baseline" confusion, we wish House Republicans had used this debate to reform Washington's fiscal hall of mirrors. Baseline budgeting is a rigged game, with spending increasing automatically each year above the rate of inflation. Anything below that inflated baseline is then called a "cut." Even Democratic Governor Andrew Cuomo took on these automatic spending formulas when he set out to tame the New York budget.
Instead of such a useful reform, a GOP faction is fixated on a balanced budget amendment. After Thursday's stall, the new Boehner plan will only authorize the second tranche of debt if two-thirds of both chambers pass such an amendment and send it to the states for ratification. This will not happen.
These columns drew much notice after John McCain quoted our July 27 "tea party hobbits" line on the Senate floor. Senator (sic) Sharron Angle responded that "it is the hobbits who are the heroes and save the land." Well, okay, but our point was that there's no such thing as a hobbit. Passing a balanced budget amendment this year is a similar fantasy. Yet outfits like the Club for Growth used the amendment as an excuse to flip from opposing the Boehner plan to supporting it. Maybe it should be the Club for Futile Fiscal Gestures.
The main result of this pointless crusade has been to damage Mr. Boehner's leverage and push the final debt-limit increase in Mr. Reid's direction. The Speaker may now have to seek the tender mercies of Nancy Pelosi to get a final bill through the House, and who knows what her price will be.
The debt-limit hobbits should also realize that at this point the Washington fracas they are prolonging isn't helping their cause. Republicans are not looking like adults to whom voters can entrust the government.
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