The federal budget battle begins. Republicans have the majority in the House and Senate, and it is up to them to come forth with a cohesive budget plan that they can pass. Here is a look at the (not) governing majority's factions as the budget battles begin – and why they might not come to any agreement at all.
Isaiah J. Poole sets the stage in Monday's post, "Four Reasons The Coming Congressional Budget Battle Matters":
The coming budget debate is about more than numbers and political scorecards. Perhaps even more so than previous years, this is a debate over whether America will be an even more hostile place for working-class people or a country that takes seriously the challenge of making its economy and politics work for everyone.
The New York Times lays out the Republican divisions, in "Chasm Grows Within G.O.P. Over Spending":
The congressional push this week to secure the first Republican budget plan in nearly a decade is revealing a chasm between fiscal hawks determined to maintain strict spending caps and defense hawks who are threatening to derail any budget that does not ensure an increase for the military.
“This is a war within the Republican Party,” said Senator Lindsey Graham, Republican of South Carolina, who has vowed to oppose a final budget that does not ensure more military spending. “You can shade it any way you want, but this is war.”
What are the "sides" in the Republican war? Politico, in "GOP fiscal, defense hawks square off over budget," looks at some of the infighting:
In the House, Speaker John Boehner of Ohio, Majority Leader Kevin McCarthy of California and Majority Whip Steve Scalise of Louisiana are stuck between the budget-cutting demands of conservatives and the desire of defense hawks to provide the military with more robust funding. In the Senate, Republicans are already getting hit by Democrats after indicating they’ll target Medicaid and food stamps.
Here is a brief look at the three main factions.
Status Quo Austerity Faction
The status quo is the anti-growth, anti-government austerity budgeting imposed by the "sequester." This is a rule that resulted from the 2011 "debt-ceiling crisis," which led to the Budget Control Act of 2011. As ransom for not forcing the U.S. government into default, Republicans were able to get severe and continuing cuts of around $1 trillion in the budget of various U.S. departments and agencies over eight years, beginning March 1, 2003. Budgets until the early 2020s are forced to be reduced by a set amount each year, regardless of need. And while increases in Medicare spending are the sole cause pf projected increases in deficits, the Medicare budget is not part of the sequester. (Anyway, health cost increases in general are slowing because of Obamacare.)
The Times story reports that some Republicans think the austerity has been good, writing, "The strict caps 'are one of the best things that’s happened to the finances of the country,' said Senator Jeff Sessions of Alabama, a senior Republican on the Budget Committee." Also, "Senator Rand Paul of Kentucky, who is expected to seek the Republican presidential nomination, said he would not support lifting the caps."
This faction likes the status quo in which austerity is gutting the government and choking economic growth (which holds back future revenues.)
Raise Military Spending Faction
The second faction wants to raise military spending, but still choke the economy with austerity. They are willing to make a deal with Democrats to end specific sequestration cuts in a few agencies and departments. The Politico story explains this faction:
"Lawmakers on the House Armed Services Committee, as well as some appropriators, are furious that House Budget Chairman Tom Price (R-Ga.) plans to stick to the Budget Control Act limit on defense spending. Instead, they want to meet or exceed President Barack Obama’s $561 billion request for defense spending — which Obama paid for by proposing tax increases."
According to Rebecca Shabad at The Hill, in "Republicans brace for budget debate":
Last week, [Sen. John] McCain (R-Ariz.) said he would vote against the GOP budget if it didn’t adjust sequester levels. Sen. Lindsey Graham (R-S.C.), who is mulling a run for the White House, said he wouldn’t vote for the blueprint if it didn’t propose sequester changes or include a reserve fund that would open the door to future negotiations.
According to Politico there are 70 members in the "increase military" faction.
"That came after 70 House Republicans wrote to Boehner in late February and told him they wanted defense spending to be at least equal to what Obama had asked for. Rep. Mike Turner (R-Ohio), who organized that letter, said those same 70 members have pledged to vote against any budget that doesn’t adequately boost defense spending — which would deny leadership a sizable bloc of GOP votes."
And they are a bit willing to work with the other side:
A bipartisan group of five senators has quietly started to discuss how to ease the sequester, a set of automatic budget cuts that hits domestic and defense programs unless Congress comes up with a fix. The senators include Graham and Republicans Kelly Ayotte of New Hampshire and Roger Wicker of Mississippi. Also involved in the talks are Sens. Tim Kaine of Virginia, a Democrat, and Angus King of Maine, an independent who caucuses with the Democrats.
The sequester fix would come through what the senators have been calling a “deficit-neutral reserve fund,” which could include closing some tax loopholes to raise revenue and other spending changes that would replace the automatic budget cuts. This fund would come separately from a budget resolution, since budgets aren’t signed into law.
At least in the Senate, Republicans are looking for Democratic support, because any legislation that would undo the sequester would need at least 60 votes to pass.
The Destroy Everything Faction
The third faction of Republicans wants to seriously gut government, cut everything and supposedly balance the budget in ten years. This is the "destroy everything" faction that even proposes cutting Social Security and Medicare. These are the hard-core types who want to tighten the austerity screws even tighter. Rachelk Stoltzfoos at the Republican outlet Daily Caller sets the stage for understanding this faction in, "Republicans Battle Over Defense Spending":
Defense hawks, such as Republican Sen. John McCain and Rep. Mac Thornberry, chairmen of the Senate and House Armed Services committees respectively, are threatening to derail any budget that does not lift strict caps on defense spending. But they face an uphill battle against fiscal hawks who are determined to balance the budget and reduce the size of government.
Which fiscal hawks? According to The Hill story:
Some House Republicans on the Budget Committee have indicated their blueprint would balance in less than 10 years, which would be sooner than budgets prepared by former Budget Committee Chairman Paul Ryan (R-Wis.).
Many conservatives had scoffed at Ryan for proposing to balance the budget in 10 years, arguing a shorter window was needed.
The Koch brothers and their Americans for Prosperity organization is behind the destroy-everything faction. Scott Bland at the National Journal explains in, "Americans for Prosperity President: GOP Budget Could 'Blow Their Majority Up'":
Tim Phillips, the president of Americans for Prosperity, has a simple message for the Republicans in charge of Congress: Don't let down conservatives who elected you to cut spending and regulation, or your time in the driver's seat might be limited.
... The non-profit group, part of a network of organizations connected to the Koch brothers, reportedly spent at least $125 million during the 2014 elections.
... "What AFP is calling for is a budget that genuinely reforms Medicare, that block grants Medicaid to the states, and that genuinely caps discretionary spending at sequester-level numbers. [...] I think the question is will they really scale back government spending and the size of government?"
Eric Pianin explains in The Fiscal Times the problem of this severe approach, in "Balanced Budget Goal Means Furious Battle Ahead":
Committee chair Sen. Mike Enzi (R-WY) and his House counterpart, Rep. Tom Price (R-GA), are committed to putting the government on a 10-year glide path to a balanced budget. That could put them, however, on a collision course with conservatives in their own party as well as with Democrats who oppose sharp cuts in domestic programs.
Even the usual "fiscal hawks" are worried that this would crash the economy:
The Senate Budget Committee received fair warning last week from a prominent fiscal conservative that their goal might be too ambitious. “It will be about $5.5 trillion [in savings] to get us to balance in 10 years,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, told the panel.
“Just to put that in perspective, that’s eight times the size of the [2012] fiscal cliff deal and it’s 65 times the size of the [2013] Ryan Murray deal, which you recall we didn’t stick to for very long,” she added.
The Republican Baseline
These factions are working from a baseline known as the "Ryan budget," passed as a budget plan before Republicans took control of both the House and Senate. So now they are trying to outdo themselves. A year ago Terrance Heath explained how this budget works, in "The Ryan Budget Shows What Republicans Want To Do To America," writing:
Sometimes a budget is a moral document. Sometimes it’s a threat. With the passage of Rep. Paul Ryan’s latest austerity budget, the GOP is once again spelling out very clearly what they want to do to America. It’s not a threat, but a promise that Americans must make sure Republicans never have the power to fulfill.
[...]
Only in the Republican mind is a reduction in spending not a cut. Whether you call it a $5.1 trillion spending reduction or $5.1 trillion in cuts, that’s how much less the government would spend under the Ryan budget. Most of those cuts — 69 percent — come from programs that serve low- and mid-income Americans.
- The Ryan/GOP budget repeals Obamacare. This alone should get it laughed right out of Washington as a non-starter. Never mind that this would take health care coverage away from millions of Americans, with no GOP alternative to replace it. ...
- The Ryan/GOP budget cuts welfare programs by $5.4 billion over 10 years. It slashes agricultural programs by $23 billion, and turns SNAP into a block grant — slashing funds and handing what’s left to states with a no-strings-attached guarantee of “flexibility.” If state governments reduce food stamp recipient numbers, they may do as they see fit with the overrun.
- The Ryan/GOP even cuts the Low Income Home Energy Assistance Program, which Ryan says is being “abused.” Could it be that Ryan is as outraged as Fox News anchor Stuart Varney that states are continuing to help the poor feed themselves by tying food stamp eligibility to home heating assistance, making more low-income families eligible for food stamps? Is formulating an end run around Republican cuts to food stamps and continuing to feed the poor “abuse”? It is, if you’re a Republican.
- The Ryan Budget destroys Medicaid by turning it into block grant. Indexing it to inflation and population growth means steep cuts, because health care costs are rising faster than inflation. States will have fewer and fewer resources for their Medicaid programs, and will take steps to slash their caseloads.
- The Ryan/GOP budget obliterates Medicare by turning it into a voucher program. Republicans swear that it’s “premium support,” not a voucher. But instead of the longstanding Medicare guarantee, the elderly will receive government subsidies to purchase private health insurance. If health care costs continue to rise faster than the general inflation rate, the “premium support” won’t keep pace, and the costs will be shifted to the elderly.
- The Ryan/GOP budget harms young Americans by cutting financial assistance, and increasing student debt. Pell grants come in for a cut through a maximum eligibility cap, and ending funding for less than half-time students. In addition, young people would have to start paying interest on their student loans while they are still in school.
- The Ryan/GOP budget paves the way for another financial crisis. Cuts to the Securities and Exchange Commission budget means fewer regulators policing the financial sector. The budget transfers the Consumer Financial Protection Bureau budget from the Federal Reserve to Congress, where inevitable cuts and partisan obstruction will mean less protection for financial consumers. ...
- The Ryan GOP budget cuts taxes on the wealthy. All these cuts go to pay for mystifying tax breaks for the wealthy. The budget reduces the top taxes rates by replacing them with two brackets of 10 percent and 25 percent, and give millionaires a $265,000-a-year tax break, at a cost of $6 trillion in lost revenue...
The Hastert Rule
Keep in mind that a lot of this dysfunction is the result of an informal agreement among Republicans called "the Hastert Rule." Even when a significant majority of the Congress might be ready to vote for something, the leadership will not allow a vote unless the issue can get the vote of a majority of Republicans.
The public largely doesn't understand that the Homeland Security shutdown "crisis" was not about whether the Congress would continue to fund the agency, it was about whether Speaker Boehner would allow the Congress to vote. When he "caved" and allowed the Congress to vote, a majority of Congress voted to fund the agency, as expected.
Never Mind What The Public Needs
All of these Republican factions want the government cut back. None of them care about investing in infrastructure, investing in science, investing in education, expanding health care and safety-net programs for people who need it, or otherwise helping the public.
Last week, Bill Scher pointed out the problem this causes for Republicans, in "Are Republicans Insane Enough To Propose a Balanced Budget?":
...with Republicans in full control of Congress, an adopted budget resolution will be akin to a party platform. Senate Republicans, who have to appeal to more diverse constituencies than House Republicans, several of whom must run for re-election next year in blue states, won’t be able to gloss over the particulars of what happens when you take a sledgehammer to school lunches, veterans benefits, child care tax credits, unemployment insurance and everything else that our government does for working people and the poor.
Stay tuned. On Wednesday the Congressional Progressive Caucus will announce their budget proposal for Fiscal Year 2016, called “The People’s Budget: A Raise for America.”
