Politics & Policy

A Disappointing Deal

A predictable consequence of Republicans’ losing a shutdown fight is exhaustion with spending fights. It’s what we saw in the 1990s, and the Ryan–Murray budget deal is, in part, a reaction to the GOP defeat of early October. Republican appropriators and defense hawks sick of the sequester felt empowered by the shutdown debacle, and Paul Ryan and the leadership are desperate to forestall yet another one.

So we are getting a disappointing deal. The agreement rolls back a portion of the sequester over the next two years in exchange for other spending cuts over the long term. The sequester is a blunt instrument that hits defense much too hard, but it had provided a rough-and-ready discipline on spending. If the deal passes, it means that there won’t be a third straight year of declining spending in 2014. The history of budgeting is that once budget caps are breached the first time, it becomes a habit. It is also a bad practice, as a general matter, to trade more spending in the short term, $65 billion over the next two years, for promised spending cuts in the long term. The deal supposedly reduces the deficit by $23 billion over ten years — in other words, by the 2020s, when the Obama years will be a distant memory.

The savings are gimmicky. The deal doesn’t raise income taxes, but it does raise taxes on airline flights. The spending reductions come from entitlements, but not any entitlement you are likely to have heard of. Supporters of the deal argue that it creates the precedent for replacing cuts to discretionary spending with cuts to entitlements, but that’s not a precedent that will mean anything to Democrats in the future.

The deal has some upside. It raises defense spending, as its Republican advocates say — although the need for this increase was created by the sequestration bargain they themselves struck with President Obama in 2011. It very modestly pares back the lavishness of future federal employees’ pensions and scales back federal subsidies for some companies’ pension plans. These changes will be written into law, and thus harder to reverse than discretionary spending cuts. And it makes another shutdown much less likely, and therefore diminishes the chances of Republicans’ rescuing President Obama from various political problems of his own making, foremost among them his catastrophic health-care law.

At the moment, though, it is causing a bigger fight among Republicans than among Democrats, and both sides of that fight are losing perspective. The deal is not a sellout or a betrayal, as some of the critics say. It is also not “ridiculous” and a sign of bad faith for conservatives to oppose it, as Speaker of the House John Boehner said yesterday in a fit of pique. Perhaps the best that can be said for the deal is that it is much too small to justify such drama.


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