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The Not-So-Grand Bargain
Speaker Boehner is right not to collude in President Obama’s profligacy.


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Rich Lowry

The White House made House Speaker John Boehner an offer he could refuse: to become the tax collector for Pres. Barack Obama’s entitlement state.

The so-called grand bargain that Boehner eschewed wasn’t so grand. It would have raised taxes by $1 trillion while leaving untouched the federal government’s newest unsustainable entitlement program, Obamacare, and preserving the bankrupting structure of the legacy entitlement programs. It was a formula for more revenue chasing ever-higher levels of government expenditure.

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The health-care bill already raised taxes by more than $400 billion over the next ten years, although that’s still not enough to truly cover Obamacare. The president wanted another round of new taxes layered on top without giving up fundamental ground on entitlement reform. This wasn’t a “balanced” approach. It was a proposed continuation of President Obama’s fiscal policy under bipartisan auspices.

Yes, the White House was willing to endorse cuts to Medicare and Medicaid. In all likelihood, they would have ended up as the dubious cuts that are the typical stuff of Beltway budgetary legerdemain. Reductions in payment rates and the like may produce savings on paper, but they rarely materialize. “Various versions of them have been included in every budget deal going back 30 years,” James Capretta, a budget expert with the Ethics and Public Policy Center, writes. “As the years go by, the savings always vanish in the regulatory complexity of the programs, and entitlement spending continues to rise just as it always has.”

To sign off on such a deal, Boehner would have put his imprimatur on a substantive fizzle while signaling his own political death wish. The Tea Party would have been after him like a Redcoat after the Boston Massacre; he’d be fortunate that tarring and feathering is out of style.

This has led to a chorus of condemnation of Republican rigidity. But the GOP is under no obligation to give way on its conviction that, over the long term, the government has a spending rather than a tax-revenue problem. President Obama isn’t willing to take steps toward the Paul Ryan vision on Medicare and Medicaid, let alone scale back or reverse Obamacare. Where is all the opprobrium for his gross inflexibility?

The two parties have a conflict of visions. Republicans view the current levels of spending — an astonishing 24 percent of GDP — as a bizarre exception to peacetime norms in America. Democrats view it as the new normal. For them, any reduction in the inexorable growth of the entitlement state is a cruel betrayal. As President Obama himself put it, “The vast majority of Democrats on Capitol Hill would prefer to do nothing on entitlements.”

The press loves the idea of men of good will working behind closed doors to hammer out their differences. Yet some differences are too great for resolution in a few negotiating sessions. The election of 2012 is the necessary and proper forum for deciding the nation’s fiscal direction.

After his historic spending bender in league with Nancy Pelosi and Co., President Obama wants a less spendthrift and less partisan image. He needs a deficit deal with the biggest headline number possible, and he needs to be seen to be working with Republicans. The grand bargain — or, failing that, any bargain — is in his political interest.

By stating categorically a deal will get done by the administration’s deadline of August 2, he’s put his credibility on the line. He’s ceded important rhetorical ground by aping the Republican argument that the deficit is harming the economy. Altogether, he appears ripe to be rolled.

All the more reason for Republicans to insist on a deal on their terms — no new taxes, and spending cuts to match the dollar amount of the increase in the debt limit. Ultimately, this is just a small patch on the red ink created by the recession and President Obama’s profligacy. If the president wants massive new taxes to address it, he can make the case for them without John Boehner’s complicity.

— Rich Lowry is editor of National Review. He can be reached via e-mail: [email protected]. © 2011 by King Features Syndicate.



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