May I take a break from my usual despair-inducing reportage to offer a few words of guarded optimism, and a little bit of qualified praise for John Boehner and the Republican congressional leadership?

Speaker Boehner does not excite many budget hawks, and there are good reasons to be skeptical of the Republican leadership in toto. But give him this: His insistence that serious entitlement reform be included in any grand bargain is exactly the right position. Entitlement deficits may not be the largest driver of our overall deficits right at this moment, but they are the biggest long-term threat to our national fiscal solvency. As I wrote early about Gov. Rick Perry’s fiscal plan: If you can get the entitlements right, you deserve a medal. What we do about entitlement spending will determine whether we squeak by or plow straight into Fiscal Armageddon.

The Democrats desperately want a tax increase — and not just because they want to spend the money. (Though, boy, do they ever want to spend the money.) Tax increases are for the Democrats what closing down the National Endowment for the Arts is to Republicans: a visceral cultural issue. The difference, of course, is that Democrats seriously intend to raise taxes. (If Republicans were going to close down the NEA, they would have done it by now.) That’s a real problem for Democrats and for the country. Because taxes are a culture-war issue for the Democrats, they keep proposing the wrong kind of tax increases, with the wrong kind of structure and the wrong goals. I do not think it is likely that Republicans are just going to roll  over for a significant increase in the tax rates for upper-income Americans, in the tax rates for investment income, or other similar rate increases. Republicans probably can (and, in my view, probably should) support a deal that trades the elimination of exemptions and exclusions (both for individual taxpayers and for businesses) for lower rates. If the Democrats were smart, they would accept that deal, structured in a way that produces a net tax increase. Instead, they’re giving every indication that they intend to make notional tax rates on high earners their hill to die on.

Boehner may not pull it off, but he is setting the stage for a double win: real entitlement reform plus some useful tax-code reform. He may not give conservatives the kind of thrill that Newt Gingrich’s bold talk used to give us, but the odds are pretty good that we’re going to get the right outcome here — not the best imaginable outcome, but the best outcome out of the plausible outcomes before us.

Even the presidential candidates largely are talking sense. Both Governor Perry and Mitt Romney have some good ideas about entitlement reform: raising the eligibility age, changing the indexing protocol, etc. Romney even supports a form of means testing — specifically, reducing the rate of growth in benefit payments for future high-income recipients. Means testing would be a key fiscal and political victory: It saves money, and it also necessitates that we stop pretending that Social Security is a national pension plan and start treating it like the straight-up welfare check it is.

John Boehner is not going to deliver one big victory that puts our fiscal affairs back on track — and that is not what we should be looking for. Single-shot, big-fix proposals are terribly attractive: 9-9-9, the Fair Tax, closing down this cabinet agency or that cabinet agency, reinstituting the gold standard, the balanced-budget amendment, etc. None of those is a likely solution, and none of those is a substitute for having leadership in Congress that will deal, day by day, session by session, and year by year with the entitlement system, discretionary spending, and the tax code. I wish that military spending were a bigger part of the conversation on the right.  Even more than that, I wish that serious regulatory reform and a state-by-state tort reform campaign were under way — both of which probably are necessary steps toward achieving stronger long-term economic growth. I am not an optimist about growth, and I think that there is a lot more keeping our growth down than public policy. But there is a great deal that we can do to get politics out of the way and let prosperity emerge.

Budget hawks must of course remain vigilant: Republicans are 100 percent capable of selling us out or cutting a stupid deal. Republicans are also susceptible to being hypnotized by the promise of tax cuts and will tell themselves fairy tales about historically unprecedented rates of growth that will solve all our problems with no hard choices needed. Caveat, caveat, caveat, etc. But given the Republicans’ position — controlling one-half of one-third of the federal government, with no lock on taking control of any of the rest in 2012 — Boehner’s stand is looking pretty good right now. It’s not morning in America, but it’s not two minutes to midnight, either.

—  Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, published by Regnery. You can buy an autographed copy through National Review Online here.

House Republicans have planted their flag. Now the Senate gets to vote.

Here is what the Senate is voting on: Whether we have a fiscal crisis or we do not. It is that simple.

As predicted, the recent budget deal and the Ryan plan have the Democrats wishing in the direst way they’d hopped on Simpson-Bowles. But among Democrats, Simpson-Bowles was dead on arrival: There simply is no plan that credibly controls spending that Democrats are inclined to accept. Now that Republicans have proposed something well beyond the Simpson-Bowles framework, Democrats are ready to celebrate a plan that they dismissed out of hand — “simply unacceptable,” the lady called it.

Ryan and the Republicans will accept the strongest deficit deal they can get; Obama and the Democrats will accept the strongest deficit deal they are forced to: That’s the basic dynamic that shapes this debate between now and November 2012. They have no credible budget plan — they didn’t even pass a budget last time around. Welcome to the Party of No, Mr. President; Mrs. Pelosi will show you the secret handshake.

The Democrats want 2012 to be about anything other than deficit-reduction. Expect an onslaught on the social-issues front, from abortion subsidies to gay marriage. Conservatives should not let them change the subject.

1. I’m glad a deal was struck. I hate Planned Parenthood — you cannot get to the right of me on abortion — but the way ahead on abortion is not the same as the way ahead on the budget. I am for seizing every marginal gain to be had on this issue, but the funding restrictions were only tinkering around at the edges. You want to win on abortion, you have to win 1600 Pennsylvania Avenue. Thanks to the usurpation of the Supreme Court — and the American people’s continuous, inexplicable tolerance of that — Congress is not really where the pro-life action is. As it stands, vulnerable Senate Democrats ought to be mercilessly reminded in 2012 that their party leader was willing to shut down the U.S. government in order to protect public subsidies for abortion — something that even many moderate pro-choicers oppose.

2. Yes, the deal could  have been better. And if it had been twice as good as this one — or ten times as good — it still could have been better.

3. But this is not the deal that matters. This is small potatoes compared to getting the Ryan reforms enacted, especially on entitlements. If Republicans had drawn the line in the sand on this deal, they might have saved the country a few billion dollars. If they draw the line on the Ryan program, they might save the country. That is the real fight. Mind the trillions, and the billions will take care of themselves.

Ezra Klein writes:

Read that again: Every single Senate Republican has endorsed a constitutional amendment that would’ve made Ronald Reagan’s fiscal policy unconstitutional. That’s how far to the right the modern GOP has swung.

He says that like it’s a bad thing.

But, 18 percent, guys? Even God only asks for ten.

The House has voted to kill HAMP, a con game being run by mortgage-servicers on American mortgage borrowers with the blessings of the Obama administration. HAMP, as I have argued, isn’t a defective program: It is a scam, a rip-off designed to be a rip-off.

Among those voting to end this fraud were 18 House Democrats including George Miller, a Nancy Pelosi protégé who told the Huffington Post:

What we saw was just a commonality of abuse by servicers, the banks, of our constituents. They were being lied to. Their documents were being lost on a regular basis. Their phone calls were not returned. They were told they’d be handed off to another person, that never took place. They were told they would be eligible in a couple months, that never took place.

This is consistent with the experience of many (too many) HAMP borrowers.

The question is: Why do most Democrats support this rip-off?

The answer is: Because it is backed by one very important Democrat: Barack Obama.

And why does Obama support it?

HAMP doesn’t really stop a lot of foreclosures, but it does slow the process down, and the Obama administration (along with the Committee to Reinflate the Bubble) is desperate to prop up the housing market by any available means, even, apparently, if that means giving an excruciatingly raw deal to a lot of vulnerable homeowners, some of whom were duped into intentionally falling behind on their mortgages in order to qualify for HAMP modifications that never came. Obama’s Treasury Department has said that it cannot even do anything to punish banks that violate HAMP’s rules.

The Obama administration knows that the housing crash isn’t over: Wall Street Journal, 21 March:

Sales of previously occupied homes in the U.S. sank by 9.6% in February and prices fell to the lowest level in nearly nine years, indications that the market remains depressed.

Existing-home sales decreased from a month earlier to a seasonally adjusted annual rate of 4.88 million, the lowest level since November, the National Association of Realtors said Monday.

The results were worse than forecast. Economists surveyed by Dow Jones Newswires had expected home sales to decline by 3.9% to an annual rate of 5.15 million.

The results called into question whether the U.S. housing market is recovering or falling further.

Housing prices ultimately are going to find their bottom. The Obama administration does not wish for that to happen at a politically inconvenient time — not with unemployment still high, gasoline prices headed up, and significant inflation in food and energy prices hovering over the economy. But HAMP is an embarrassment: Basically, the banks pretend to put borrowers on the road to a permanent loan modification and then begin conveniently losing paperwork, neglecting to process it in a timely fashion, suddenly discover documentation problems, etc., with the end result that many borrowers end up far worse off than they were before. Many who might have been able to avoid losing their homes will lose them because of the corrupt way in which HAMP has been implemented.

Congress should not only end this program, it should open an investigation into the fraud connected with it. If there is any truth at all to the stories being relayed by HAMP victims, some bankers should go to jail over this.

This is an excellent idea. Why is this sort of thing even debated? It should be SOP.

Simpson-Bowles lives!

Sort of.

A “Gang of Six” in the Senate — Republicans Coburn, Crapo, and Chambliss, Democrats Durbin, Warner, and Conrad — is working to create legislation that would put many of the Simpson-Bowles deficit-reduction proposals into effect. That means raising the Social Security retirement age to 69, reducing Medicare benefits for higher-income oldsters, and raising taxes by getting rid of the mortgage-interest deduction and other special-interest tax breaks.

The Simpson-Bowles plan is by no means perfect — no more perfect than recent Republican efforts to make modest cuts in non-defense discretionary spending, no more perfect than Paul Ryan’s Roadmap. But each of those imperfect options represents a step in the right direction — which is to say, a step toward national solvency.

The tax part of the plan is especially good, in my view, even though it is a net tax increase for the country. The proposal would lower overall income-tax rates in exchange for eliminating a lot of special-interest tax breaks, notably the mortgage-interest deduction. The mortgage-interest deduction is a destructive force on its own, encouraging would-be homeowners to take on larger debts than they should, and to pay more interest than they should, contributing significantly to the inflation of the housing bubble and the subsequent financial crisis. It is difficult to imagine that as many people would have signed up for interest-only mortgages without a tax code that richly subsidizes them. Getting rid of it would be a good idea regardless of revenue considerations or tax-rate considerations; getting rid of it in exchange for lower income-tax rates and $4 trillion off the deficit (I know, I know — there’s a leap of faith in there, but if we’re going to spend $1, we have to tax $1) seems to me a very good deal.

The lower corporate tax is worth having, too.

All that being written, a note: This is not the most inspiring group of senators to be found. I think highly of Senator Coburn but have my reservations about any plan that leans heavily upon Senator Durbin.

In any case, I think the Republicans have already missed an opportunity on this one: An Obama-appointed commission’s bipartisan chairmen produced a program with real cuts and real improvements to the tax code — why not run with that? Why not get what’s worth getting out of Simpson-Bowles and then push for the next round? They are getting a second bite at the apple with the Gang of Six, and they should take it.

—  Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, just published by Regnery. You can buy an autographed copy through National Review Online here.

Republican budget boss Rep. Paul Ryan drops the bomb, with a plan to reduce non-defense discretionary spending to 2008 levels — this year, not at some distant remove in the theoretical future.

If you haven’t been following the ins and outs of the Republican intramural budget battle, here’s a bit of news for you: This is a compromise, and not one that the deficit hawks really wanted. The original plan was to cut a full $100 billion this year; some Republicans argued instead for a prorated cut that reflects the fact that part of the budget year already has passed, applying the 2008 standard only to the remaining seven months. That’s what we got — a  compromise that hawks ought to be able to live with.

Good stuff, here: $58 billion off the president’s request in non-defense spending, and $16 billion off the military.

Republicans could be out there saying, “Well, let’s wait until we get the Senate back,” or “There’s not much we can do while Obama’s in the White House.” And lots of conservatives would cut them slack if they did. But they aren’t, and that is an excellent sign.

The good news is that Republicans are at least serious about cutting non-defense discretionary spending back to 2008 levels. The better news is that the RSC has a plan to cut them back to 2006 levels after that.

I haven’t seen any evidence that the GOP is serious about tackling the entitlements and defense spending, but they’re talking a good game so far, and they will be wise to avoid an Obamacare-style overreach that backfires on them. That’s the tricky bit:  They have to go relatively slowly, for political reasons, but they do not have forever, for economic reasons. The tools are all blunt-force implements, but the timing has to be exquisitely fine: juggling sledgehammers.