The Budget Battle Favors the GOP
Voters strongly favor the GOP’s approach, as long as it’s not labeled “Republican.”


Andrew Stiles

Majority Leader Harry Reid (D., Nev.) is already seeking to limit debate on the budget. Republicans expect him to “cut loose” four of his most vulnerable incumbents — perhaps Mark Pryor (Ark.), Kay Hagan (N.C.), Mark Begich (Alaska), and Max Baucus (Mont.) — by letting them vote against the budget — an indication of how Democrats think voters in those states may respond. Reid cannot afford any more defections if he wants the budget to pass; so some red-state Democrats will have to support the plan and be prepared to defend it.

Republicans will be ready to pounce. “This is a budget for people who think Washington is spending taxpayer dollars wisely,” says Brad Dayspring, communications director for the National Republican Senatorial Committee. “It’s going to be pretty hard for these Democrats, especially in red states, to make that case.”

By proposing a budget, Senate Democrats have opened themselves up to many of the same types of attacks they have levied against Republicans for years. After repeatedly criticizing the vagueness of GOP tax-reform proposals, Democrats have authored their own fuzzy-on-the-details plan. The same Washington Post editorial that painted the Democrats as complacent also slammed their budget as “woefully imprecise” for offering a blanket assertion that it would affect only the “wealthiest Americans” and the “biggest corporations.” History shows that Democrats have been unable to agree on an appropriate definition of “wealthy.”

“It’s revealing that there is not more policy detail,” says Douglas Holtz-Eakin, former director of the Congressional Budget Office and president of the American Action Forum. “Can they do it and only hit the rich? That’s going to be tough, certainly harder than people admit.”

According to the Joint Committee on Taxation, there are few, if any, major tax expenditures that “disproportionately” benefit the rich, as Democrats claim. Many, such as the mortgage-interest deduction, the property-tax deduction, the child tax credit, and the earned-income tax credit, are heavily, and in some cases entirely, weighted toward the non-wealthy.

To be fair, the Democratic budget does cite the so-called corporate-jet loophole as a specific target for elimination, but that would raise less than $300 million a year in new revenue, or about 0.3 percent of the total that Democrats are looking to achieve. Democrats and the White House have often employed this loophole as a talking point on spending issues, yet it was not included in the Senate Democrats’ recent plan to avert the sequestration spending cuts.

Broadly speaking, the two “key principles” cited in the Democratic plan are telling: first and foremost, to “restore fairness to our tax code,” and second, to “boost economic growth and job creation.” This emphasis on fairness over economic growth, experts suggest, will almost certainly lead to highly inefficient results. The Heritage Foundation, for example, estimates that when accounting for the negative impact on economic growth, the Democratic budget would raise only 57 percent of the tax revenue it assumes.“High corporate taxes harm job creation, which hurts the economy, and then who really pays?” Holtz-Eakin asks. “The middle class.”

The Hill released a poll on Monday showing that likely voters may be inclined to agree with Republicans on the budget. By a large margin, 55 to 28 percent, respondents favored an approach more in line with the GOP plan. The same poll showed, however, that Republicans still have work to do rebuilding their brand: “As soon as respondents heard the words ‘Republican’ and ‘Democrat,’ the picture changed drastically. A plurality of voters, 35 percent, said they trust Democrats more on budgetary issues, while 30 percent said they trust Republicans more. A full 34 percent said they trust ‘neither’ party.”

Republicans have already begun the process of trying to reestablish that trust, which will take time. But at least as far as the budget debate is concerned, as one GOP aide explains: “We’re just happy we’re not debating ourselves anymore.”

— Andrew Stiles is a political reporter for National Review.