StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



House GOP Does the Inevitable: Backtracks on Pledge to Cut $100 Billion this Year

06 Jan 2011
Posted by Stan Collender

Even if you put the close-to-impossible politics aside, any budget wonk would have told the GOP that for purely technical reasons it was going to be almost impossible to deliver on the promise it made in its Pledge to America to cut $100 billion from the federal budget this year.

That's why it was anything but a surprise when, as Jackie Calmes noted in yesterday's New York Times, on the first day they formally took control of the House of Representatives Republicans did what every fiscal technician knew was inevitable: They announced that they were not going to cut domestic discretionary spending to 2008 levels as they repeatedly said they would do.

The technical side of this has always been quite simple: It's exceptionally difficult to cut spending when we're already four months into the fiscal year; the reductions have to be much larger to achieve the desired level of savings in the shorter period of time.  In this case, House Republicans were looking at making the decision as the current continuing resolution expires in March, that is, with only six months left in the year.  Reducing spending by $100 billion in six months meant coming up with cuts closer to $200 billion on an annual basis.  Given the areas of spending the GOP said would be exempt from reductions, the cuts from what's left would have had to have been even larger and included massive layoffs.  When they finally realized what they would be asking their members to vote for, the political reality of the situation apparently finally hit home for House Republicans.

In addition to the GOP finally recognizing that federal budget reality often intrudes on political promises, there are a number of interesting aspects to the Republican decision to punt on its pledge to cut $100 billion in spending this year.

1.  The GOP got nothing in return.  Even if it always knew the $100 billion spending cut pledge was going to be impossible to keep, it makes little sense for Republicans to unilaterally decide not to comply with it without getting something in return from congressional Democrats or the White House.  The hardball strategy would have been to put a new spending level in place that assumed the full $100 billion in cuts and then agree to less in a few months in return for something when negotiating with Democrats over the extension of the continuing resolution.  The fact that they didn't do this is more than a little curious.

2.  This is at least the second time the tea party has been hosed by congressional Republicans since the election in November (many tea party types are very unhappy about the estate tax deal with the White House).

3.  The GOP insistence that the pledge to cut $100 billion this year was just a target or, as Calmes put it in her story, "hypothetical," is revisionist nonsense.  It was repeated so often during the campaign that it was close to a GOP mantra.

4.  The GOP claim that it's all the Democrats' fault because the CR will be in effect until March is similarly ridiculous.  The GOP had the opportunity during the lame duck to insist on a shorter CR if it had wanted one and could have forced the issue by filibustering the bill in the Senate.  It also could have pushed for 2011 spending cuts in that CR.  It didn't.

Here is something I have been

Here is something I have been wondering about for a while. If SSI is paid for with a dedicated tax, why is it on the table for spending cuts? Is there a part of Social Security that is paid out of general budget revenues?


The answer to the second

The answer to the second question is no. In fact, SS has been running a surplus for decades, which is why the rest of the government (defense and all of the other departments and agencies) owes the SSTF trillions (literally) of dollars. The answer to the first is that if benefits aren't cut, then the rest of the government will have to pay back the trillions of dollar it borrowed (and used poorly) between 1983 and now. And the only way the rest of the government will be able to pay back the money it owes is to raise taxes of the non-payroll variety, primarily income taxes. And that means raising taxes on the rich by a lot. A whole lot. Cuts won't come close to fixing the finances of the non-SS portion of government. Being paid back by the rest of government is the only way for the SSTF to pay out the benefits it has promised over the years. But obviously the rich don't want to pay more, so their lackeys in Congress and in the various think tanks keep yammering that SS benefits need to be cut. In other words, follow the money.


Thanks for the clarification,

Thanks for the clarification, that is what I thought the case was. It doesn't seem too dissimilar from the state pension issues going on across the country: Employers (states) negotiated contract with their employees (unions) to essentially defer salary until retirement, and now refuse to honor those employment contracts. Between SSI/pensions and the mortgage foreclosures happening, there seems to be a concerted effort to undermine contract and property law in this country.


$100 billion in cuts was more than just a "hypothetical"

The $100 billion in cuts was an explicit part of the pledge. The second bullet point in the Pledge to America's Plan to Stop Out of Control Spending was: "Cut government spending to pre-stimulus, pre-bailout levels saving at least $100 billion in the first year alone".

It seems kind of hard to misunderstand that, doesn't it?


Stan, I'm glad to see you're

Stan, I'm glad to see you're starting to get the idea here. Current Republicans are nothing like the party you are familiar with from the past, and they will lie through their teeth to get what they want, and what they want has *zero* to do with any consideration of even the perceived good of the nation--as flawed at that might be--and *everything* to do with securing electoral power and refusing to share any of it with Democrats. These people are anti-American lunatics, and their farce of reading the Constitution today on the House floor--which they haven't the faintest bit of understanding or respect for--was absolutely nauseating.


I recall hearing the promise

I recall hearing the promise to cut 100 billion from Boehemer, Ryan and many others. It's also in the pledge to America. No excuses and no hypotheticals. They are liars and will not cut anything. In fact, they will increase spending and increase the deficit. Congressman don't get power by holding back dollars from their constituents. If they cut anything, it will be whatever govt does to help poor children since children do not vote.




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