Budget Politics and Spending Realities

by Steven F. Hayward

I’m still puzzling over what to make of the budget deal. The case in its favor is that it confirms Republicans have political momentum on their side, and politics is like other team sports, where shifts in momentum on the field signal a clear turn ahead on the scoreboard. Politico had a story out Sunday night making this case, including this very interesting comment:

A top Democratic official, insisting on anonymity in order to be candid, said: “The fundamental problem of the whole process is Democrats have zero ability to describe what our view of government really is. So basically all we do is defend the status quo against attacks from the right-wing fringe of the GOP.”

Being the party of “defending the status quo” is not a good place to be in politics or on the sports playing field. The hazard of this and prospective future budget deals is that they may be partly phony, that they will use gimmicks and tricks beneath the big headline numbers to preserve spending in the “out years,” as they say in the spending trade. Newly elected Tea Party members of the House may not be familiar with these tricks, and should especially watch out for the Senate language that will emerge from the conference committees that draw up the technical language.

I’ve seen this movie before. This is exactly what happened in the first year of the Reagan presidency. In the spring of 1981 Reagan won a big Capitol Hill victory with a spending cut of $36 billion — on paper — back when $36 billion was real money. Trouble was, once all the gimmicks, such as moving some spending into the next fiscal year and calling it a “cut,” were figured out, David Stockman figured the real cut was only about $16 billion. The Reaganites, like Hill Republicans celebrating Boehner’s budget deal this weekend, thought those budget cuts were the first of many and planned to push more cuts, but it turned out to be the high-water mark of budget cutting for the entire Reagan presidency. After the economy swooned in the fall of 1981, political momentum for further cuts was gone. Instead, establishment Republicans like Bob Dole spent the next seven years trying to get Reagan to raise income taxes.

That’s where the other sentence in that anonymous Politico quote comes in: “Democrats have zero ability to describe what our view of government really is.” There’s really nothing new since the 1980s: Liberals will defend the “social safety net” from cuts and call for higher taxes on the rich. We should revive Reagan’s simple slogan, which he repeated often: The government is too big, and it spends too much. In the 1980s there was never really a majority, even in the GOP-held Senate, for this proposition, and it was never even close in the House. Today may — may — be different.  This may be the crisis of the welfare state that finally tips public opinion behind serious retrenchment, and renders ineffective the old liberal playbook of “saving” the social safety net.  The Wisconsin judicial vote last week, a proxy referendum on Scott Walker, is encouraging and may be more politically significant than the budget deal.  But Tea Partiers and others are right to worry.