Clock Is Ticking With Government Shutdown Likely

The 11th hour scramble to approve a budget for 2011 is Act I. Ryan's Plan is the run-up to Act II.

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Once again, it’s Beat the Clock on Capitol Hill. (The reference is to a popular game show of the 1950s in which contestants were asked to solve problems within an assigned time limit.)  As both parties, each in control of one House of Congress, seek to assemble a budget that their base constituencies can live with, the clock continues to tick with shutdown a likely outcome. 

[ See 10 effects of a government shutdown.]

Their contest has been going on in since last fall, when the GOP, invigorated, by the “Tea Party” (whatever it is), won control of the U.S. House of Representatives. All sides interpreted the results as signs that voters wanted to cut spending and deficits and considered the two-year debate that the administration began over healthcare far from over. [ See a roundup of political cartoons about the GOP.]

To date, the most visible results the Republicans produced came in December, when they were credited for persuading Obama to extend the Bush tax cuts for two additional years. In exchange for his going back on a campaign pledge to allow top bracket tax rates to rise in the beginning of 2011, the GOP made no serious or sustained effort to block two of Obama’s priorities: the repeal of “don’t ask, don’t tell” (which allowed gays to serve openly in the military) and the passage of the New  START treaty with Russia. Rather than usher in a new “era of good feelings,” as some had hoped, the holiday season agreements proved among the shortest political honeymoons in history.

Obama began this long descent from what historians may remember as the high water mark of his presidency when he submitted a budget that did nothing to address mounting deficits, he had repeatedly proclaimed “unsustainable.” Many saw this as an attempt to spur the Republicans into submitting a plan to address current and future deficits. That, of course, meant taking on their principal cause, growth in entitlement spending. [ See editorial cartoons about the federal budget and deficit.]

Republicans remember all too well how Democrats reacted when Barry Goldwater, in 1964, proposed allowing retirees to opt out of “government-run” retirement plans; when Ronald Reagan, in 1981, hinted at tightened eligibility requirements, fewer benefits to early retirees, and delayed cost of living increases; and when George W. Bush proposed privatizing Social Security. They declined the bait. (Among Democratic assaults they sought to avoid were “Republicans want to throw grandma out into the snow” and  “they seek to balance the budget on the backs of retirees.”)

Because Congress and the president failed to approve a budget for 2011, as required by law, the “ballet of the budget” is playing out in two acts. The 11th hour scramble to approve a final budget for 2011 is “Act I.” The “road map” Rep. Paul Ryan introduced this week is the run-up to “Act II.”

Last month, the Tea Party sensitive House of Representatives passed a resolution cutting $61 billion in discretionary spending (the 16 percent of the budget not allocated to entitlements or defense). Barrages of protest from boosters of NPR, the U.S. Institute of Peace, Planned Parenthood, Teach for America, the Arts and Humanities Endowments, and other entities followed. Most made two contradictory points: 1) that favored program consumed a pittance of federal funds; and 2) that the world would end if that pittance were not held sacrosanct. 

Sensing an opportunity to divide Republican leadership from its backbencher (Tea Party) base, the Obama administration agreed to cuts of $33 billion. As of this writing, Speaker John Boehner, hoping to reassure the most raucous of the House GOP freshmen, raised the bar to $40 billion. Some find it inconceivable that government services will come to a screeching halt, with passport applications unprocessed; national parks closed; and military families borrowing money to pay for gasoline and groceries; all over an $7 billion dispute.  But, as Mark Twain observed a century ago, “Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself.” [ See political cartoons about the Tea Party.]

With the two sides at loggerheads, Ryan came forth with a budget for 2012 that has the potential to be a real game changer. He countered the president’s dodging with a real plan that would reign in entitlements. He would turn Medicare into a voucher system with a capped federal contribution, and replace Medicaid as we know it with block grants to the states. He would attack deficits by spurring economic growth through tax cuts, elimination of loopholes, and slashes in corporate welfare and, eventually, though spending reductions over time.

Ryan is right to term his proposals more of a cause than a budget. His allies and adversaries rightly see his proposals as nothing less than a reversal in the assumptions policymakers have been making for 70 years about the impact increased government interference into the economy has upon its citizens. With the president and pundits paying him scant attention, Ryan worked into his plan the most important of three austerity principles New York Times columnist David Brooks advanced in a much-heralded column, entitled the “New Normal:” [ Check out editorial cartoons about the economy.]

Trim from the old to invest in the young… adjust pension promises and reduce the amount of money spent on health care during the last months of life so we can preserve programs for those who are growing and learning the most.

China, India, and Brazil, all rising nations seeking to raise the standard of living for their populations and compete with the United States economically and, perhaps, in other ways, are doing precisely that. In seeking to provide an alternative to Obama’s budget, Ryan may have just put his finger on the most important issue of his time. And time is on his side.