What's In This Budget Deal For Republicans?

Congressional Republicans and Democrats are supposed to reach an agreement on 2014 spending by Dec. 13, well in advance of the Jan. 15 deadline when the government will shut down without a new spending bill.

Weirdly, they might actually succeed. That’s what Politico and Businessweek say, anyway.

I’ll believe it when the rumoured deal actually passes the House of Representatives.

I understand why Democrats would go for the emerging deal, which would unwind some portion of this year’s scheduled automatic spending cuts, and replace them with less-unpalatable ways to cut the deficit. The replacements would include higher fees for air travel, cuts to federal employee retirement benefits, and the sale of government-owned wireless spectrum.

Rather than spending $US967 billion on discretionary programs (roughly, everything except interest and entitlements), the federal government would spend closer to $US1 trillion, about a third of the spending increase Democrats want.

But why are Republicans keen on this deal? One of their most prized policy victories of the last few years is the spending caps in the Budget Control Act of 2011, which have held discretionary spending to extremely low levels. The rumoured deal would give up part of that victory.

Republicans would get two things in exchange for that concession:

  1. Some of the increased spending would be on the military.
  2. There would be no government shutdown.

Point (1) was supposed to be the reason that the Budget Control Act’s automatic spending cuts would never be implemented — Democrats were supposed to hate the cuts to non-defence spending and Republicans were supposed to hate the cuts to defence spending and that would drive them to reach a deal that replaced the cuts with some combination of tax increases and entitlement cuts.

But in practice, most Republicans haven’t been too bothered by the military cuts and have been satisfied to bank the automatic cuts, military and all, as a policy victory. That’s why the automatic spending cuts are in effect for 2013. I don’t see what’s changed to make Republicans willing to accept higher spending levels in 2014.

Point (2) may what’s motivating Republicans toward a deal. The government shutdown was politically disastrous for Republicans, but once it ended, they were able to shift to making hay out of the botched implementation of the Affordable Care Act. Cutting a deal to avoid another shutdown, even if it means making some modest policy concessions, will help Republicans stay on favourable political ground. This is a good reason for Republican House leadership to be eager to take the emerging deal.

But Republican House leadership was eager to avoid a government shutdown last time around, too. The question is, did rank-and-file House Republicans learn the right lessons from the October shutdown? Will they stand up to what is sure to be opposition from Heritage Action, the Club for Growth and other outside conservative pressure groups?

I can buy the idea that Rep. Paul Ryan (Wis.), who is leading negotiations for House Republicans, will reach a spending deal with Sen. Patty Murray (D-Wash.) I remain sceptical that such a deal can pass the House of Representatives with a majority of Republican votes, and without making outside conservative groups go insane, before the government shutdown deadline of Jan. 15.

But we’ll see.

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