Next Battles: Spending & Cuts

Terry H. Schwadron

July 22, 2017

With seeming failure of the Republican health care proposals, or at least this round, as the result of schisms within the Congressional Republican caucuses, the question becomes why the result will be different with the next big issues facing Congress — the federal budget, proposed remakes of the tax code, a vote to raise the debt ceiling and more.

After all, the same ideological splits will be reflected — and gerrymandering and Trump politics suggest that prospects for change in the 2018 elections seems a far-off dream. And this is to say nothing about the President acting as his own one-man political party that does business through Republicans just as a point of convenience rather than agreement in principle.

Consider the example of the Republicans following exactly the playbook for the health care bill with majority members on the House Budget Committee issuing their own blueprint for the budget, seeking approval under the same “budget reconciliation” guidelines that require only a simple majority vote. It is not a bipartisan document, and it is a reflection of years of pent-up Republican standard-waving principles.

Towards a balanced budget in 10 years, a stronger defense and stimulation for economic growth, the budget proposal described by Diane Black, Republican chair of the Budget Committee, calls for billions and billions in cuts in social services, more money for the military, and generally presenting the budget as an outline for huge tax cuts that generally favor corporations and the wealthy.

From its introduction, the budget proposal “reverses the drift toward excessive spending and larger government; it reinforces the innovation and creativity stirring in the myriad institutions and communities across the country; and it revitalizes the prosperity that creates ever-expanding opportunities for all Americans to pursue their destinies. Like any good budget resolution, our FY 2018 budget expresses a vision of governing, and of America itself.”

Free translation: Cuts in Medicare, as well as those proposed for Medicaid and in Social Security, reductions not only in “discretionary” monies but guaranteed social services, elimination of money for arts and sciences, cuts in foreign aid and enforcement of environmental and consumer protection.

The issue, of course, is that to pay for more military spending, you need cuts elsewhere; “reconciliation” means not spending more. To pay for tax cuts, you need cuts elsewhere. To balance the budget, you need cuts elsewhere.

As with the President’s earlier budget proposal, this too assumes a jump in economic growth, an assumption that increasingly looks more rosy than achievable. The President assumed a doubling of economic growth; the Congress takes a more middling growth path.

But will they have the votes? Clearly, there will be few, if any, Democratic votes for support. But among Republicans, we see more evidence daily that we have a new political party set-up emergent, splitting Tea Party adherents wanting more and more cuts for a smaller and smaller government, and somewhat more moderate Republicans, who still want to look at evidence before voting.

The health care debate is useful, as well, in showing that the President is either not present for the details of real legislation or powerless in the discussion. He is not a leader, even within his party. He is not even effective in threatening Congress members who do not vote as he wants.

Though it is a top-level outline only, the House Republican budget proposal also calls for consolidating tax brackets and cutting rates, repealing the alternative minimum tax and switching the United States from a worldwide tax system to a territorial tax system, which would tax only the domestic income of corporations. The fact that the budget blueprint dictates that the rewrite of the tax code cannot add to the deficit could set up a clash between Republicans in Congress and the White House, which has been more open to temporary tax cuts that add to the deficit. President Trump has promised the biggest tax cut in history.

Now comes the rub. All of this basically has to start moving within the next month to be effective on the 2018 budget. Given the rancor and splits seen in the health care debate, we can expect to see an overdramatized presentation of various ideology vs. practicality debates among Republicans alone. Democrats are left begging their Republican colleagues for public hearings that may never arrive.

What we learned in the health care debate most recently is that there is no Republican majority other than in name. The President is Republican by choice, with few, but some strong ideological goals; the most conservative and the most moderate Republicans seem to represent totally different constituencies. And the Democrats seem broken altogether in this Congress.

Meanwhile, our well-being as a society seems to hang in the balancing of extremely narrow partisan concerns. Sad.

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