A bold conservative agenda may prove elusive

Compromise is often necessary in politics, but political leaders who never make decisions based on their principles will invariably wind up operating in damage control mode versus offering positive proposals. It’s been suggested, moreover, that Republicans are particularly prone to this pattern. The art of standing on principle, Kenneth Blackwell, Washington Times, 3/7/15.

In recent years Democrats proposed outlandish new spending and regulatory measures. Republicans responded by supporting slightly less-bad policies. Imagine your next-door neighbor declaring that he wants to burn down your property. You propose a typical Republican “compromise,” agreeing to torch the garage tonight, tool shed tomorrow night, and house the night after.

Although overstated, the analogy makes a valid point. Consider, for example, how liberals have found one excuse after another for perpetuating wasteful spending, making the tax system ever more complex, and growing the national debt, while conservatives keep making concessions and retreating.

In January, House Speaker Paul Ryan urged congressional Republicans to try something different. We should develop a bold conservative agenda, he suggested, which would give the GOP something to run on beyond opposition to the Democratic record. Five broad areas were designated for attention: national security, jobs & economic growth, healthcare, poverty & opportunity, and restoring the Constitution.

This project sounded promising, but it wasn’t clear from initial statements what the envisioned agenda would look like. We didn’t notice much emphasis on cutting spending or restructuring entitlements. Commitments to “fix the tax code” and “maximize the nation’s energy potential” could mean just about anything. And what type of healthcare plan was envisioned to replace GovCare? Congressional Republicans plan a positive agenda,

Speaker Ryan rolled out the proposal publicly at a Heritage Action forum on February 3. One of his key arguments was that Republicans needed to stop the “circular firing squad” routine and unite behind a positive vision, lest they be successfully portrayed as “angry reactionaries” in the fall elections.

In response to a question, Ryan stated that the replacement healthcare law would be “patient-centric.” Although not predicting what might happen in the Senate, he envisioned the House completing its budget and all 12 appropriation bills “before July.” And he acknowledged the urgency of restructuring entitlements now to avert far more painful adjustments within a few years, even though this challenge didn’t seem to be mentioned in the preview of coming attractions. Conservative Policy Summit 2016, Heritage Action,
2/3/16 (1st video, 27.5 minutes).

All well and good, but six weeks on there has been little apparent progress in crafting a bold conservative agenda and we think the project may be in trouble. Forbearance until after the elections might well be a better strategy than promoting a wishy-washy legislative package. In other words, Republicans should “go big” or keep quiet.

I. Spending – There is a schism in the House between GOP moderates and GOP conservatives re the overall discretionary spending level for fiscal year 2017, and it has been holding up completion of the budget. The leadership and moderates don’t want to relitigate the spending level increase that was negotiated before the departure of House Speaker John Boehner. Conservatives argue, however, that they voted against the increase last October, the deficit outlook has gotten worse since then, and their constituents expect them to hold the line on spending.

Either position is arguable, but it strikes us that the amount in dispute – about $30 billion in spending authority for 2017 (less than 1% of total budget outlays) – is too small to repudiate the spending deal and give Democrats an excuse to demand new concessions. Ryan warns GOP: Spending process is falling apart, Joel Gehrke, Washington Examiner,

If a $30B spending level cut was made, moreover, the next question would be how to allocate it. Democrats would predictably demand that the cut be prorated between defense and nondefense spending. Some congressional Republicans would disagree, insisting that defense spending cannot be reduced any more without endangering national security.

Various ideas have been advanced for pacifying House conservatives, e.g., offset the $30B in extra discretionary spending with a firm commitment (tied to “must pass” legislation) to cut outlays for entitlement programs by a like amount. So far the proposed budget has stalled; another vote of the House Budget Committee is expected this week. Committee approval wouldn’t ensure approval of the budget by the full House, however, let alone the Senate. Tensions in GOP as deadline [April 15] for budget nears, Alexander Bolton, thehill.com,

It isn’t essential to approve a budget before starting to move appropriation bills as the top line spending numbers were previously agreed to. Despite some loss of face for the GOP leadership, a budget may wind up being dispensed with. Paul Ryan’s House agenda upended by Trump, Cruz dominance, Billy House, bloomberg.com,

The odds are increasing that either the House or the Senate, or both, will skip a budget this year. The Senate Budget Committee said Monday it would postpone action indefinitely on a fiscal 2017 budget resolution, and Senate Majority Leader Mitch McConnell said Tuesday that he would move ahead on spending bills without waiting for a budget plan.

Budget or no budget, the appropriation bills could be used to defund wasteful programs or make desired policy changes. And with conservative thrusts dispersed in 12 separate bills (rather than appearing in one omnibus measure), it would be harder for Democrats to charge that Republicans were inviting a government shutdown.

There is no shortage of conservative targets. One recent study proposed dozens of specific spending cuts for fiscal year 2017, adding up to a savings of $100B versus the $30B reduction House conservatives have been seeking, plus about two dozen “riders” to force desired policy changes. Blueprint for balance: A federal budget for 2017, Heritage Foundation,
March 2016 (download PDF).

Based on a high spot review of the Heritage proposals, we would be inclined to agree with essentially all of them. Here are some of the larger items (see “go to” pages in the PDF for details).

Screen Shot 2016-03-12 at 3.41.57 PM

Most of the Heritage cuts would reduce subsidies, etc. for special interests (corporate or nonprofit). There are essentially no welfare changes in the mix, with the exception of a proposed savings of $3.8B from reforming the healthcare program for military dependents (p. 44). Substantial additional savings could be realized, no doubt, by pruning some of the government’s many welfare programs.

Note also that some of the proposed changes would generate far larger economic savings than is apparent. Thus, compliance cost savings for the American public from eliminating or reducing funding for over a dozen EPA programs (pp. 78-85) might exceed the $0.8B budgetary savings by a factor of 20 or more.

So why aren’t Republicans moving full speed ahead to demonstrate their conservative mettle? Simply put, every proposal on the Heritage hit list (and other targets that might be identified) would be fiercely resisted by the interests affected and their supporters in Congress. “Clean energy” fans relish energy subsidies and climate programs; labor unions like the Bacon-Davis Act because it results in higher pay for highway construction workers; etc.

And just imagine the resistance to some of the other proposals, such as eliminating Violence Against Women Act grants (p. 35), the Legal Services Corporation (p. 36), and the National Endowment for the Arts (p.91); protecting freedom of conscience in healthcare (p. 108); halting the implementation of union persuader regulations (p. 111); restricting funding for sanctuary cities (p. 155); and withholding grants for seizure of private property (p. 160).

Republicans do have some leverage as a result of holding majorities in both houses of Congress, but so long as the filibuster rule is in effect Senate Democrats can (and last year did) block appropriation bills from being taken up (much less passed). And while Senate Minority Leader Harry Reid has indicated a disposition to take up appropriation bills in a businesslike fashion this year, he has also warned that Republicans shouldn’t overplay their hand. Divided GOP struggles to find budget deal, Susan Ferrechio, Washington Examiner,

"If they're going to try to make defense not on par with the middle class and then try to put a lot of these riders that we know are trouble, then they'd better be very careful what they bring to us, because we proved last year what we can do, and we can do it again," warned Senate Minority Leader Harry Reid, D-Nev.

Don’t imagine that all of the resistance is on the Democratic side of the aisle either, because Republicans also find it convenient to favor the special interests (a fertile source of campaign contributions) and avoid making political enemies.

II. Taxes – A statement of principles for envisioned tax reforms was recently put on the table. To us it sounded more like an attempt to satisfy everyone than a bold overhaul of a hideously complicated tax system that involves inordinate compliance costs and distorts the functioning of the economy in many ways. No overall tax increases to reduce deficits (we agree) – no overall tax cuts that would materially increase deficits (we agree) - no tax increases for any broadly defined group of taxpayers – eliminate tax preferences (after a whole raft of them were extended in the omnibus spending/tax bill last December). GOP task force on tax reform starts work, Joseph Lawler, Washington Examiner, 3/2/16.

What would be left to change that would make any real difference? The task force has already come up with a proposed contribution to “the larger budget effort,” but it sounds like a gimmick versus genuine reform. House GOP hopes to break budget impasse with tax bills, Sarah Ferris, thehill.com,

The House Ways and Means Committee on Thursday released a “budget savings” package that it says will cut $16 billion in two years by targeting overpayments in government programs like ObamaCare. *** The $16 billion in savings — totaling $98 billion within a decade — is intended to appease fiscal conservatives, who have strongly opposed House GOP leaders’ budget plans that rely on a deal with the White House and would add about $30 billion in spending next year.

III. Context – The opportunity that Speaker Ryan perceived to develop a Republican agenda for the fall elections is evaporating because neither the frontrunner in the GOP presidential race nor his nearest pursuer seem disposed to seek policy advice from congressional Republicans. Paul Ryan’s House agenda upended, op. cit., 3/8/16.

With the two Republican front-runners -- Donald Trump and Senator Ted Cruz -- effectively running against Congress and the rest of the Republican establishment, Ryan more than ever needs to deliver on some kind of agenda in his first full year as speaker. Otherwise, he could help cement Congress as a distinctly junior partner in a Trump or Cruz presidency.

Also, controversy about filling the Scalia vacancy on the US Supreme Court will provide a test of GOP resolve such as will leave little appetite for avoidable battles in other areas.

The GOP position that no replacement for Scalia will be considered until after the current president leaves office seems understandable, as we suggested last week (A setback for affordable energy,
3/7/16), but may prove hard to defend if a seemingly moderate replacement is nominated.

The president’s choice will reportedly be announced soon, and a campaign to support his nominee is already underway. Senate Dems: GOP will cave on Supreme Court, Susan Crabtree. Washington Examiner,

fter huddling with President Obama at the White House with other Democratic senators, Sen. Chris Coons, D-Del., predicted that "pressure will begin to mount for the Senate to do its job, for the Judiciary Committee to do its job, for our Republican colleagues to meet with an [eminently] qualified candidate and to hold a hearing so we can go back to a full, competent and functioning Supreme Court." Coons was joined by Sens. Pat Leahy of Vermont, Chuck Schumer of New York, Al Franken and Amy Klobuchar of Minnesota and Richard Blumenthal of Connecticut. The strategy session came a day after it became clear that Obama could make his Supreme Court pick as early as Wednesday of next week.

Senate Republicans can carry the day on this issue if they stick together, and it seems too late for them to backtrack now. For better or worse, therefore, delaying selection of the next Supreme Court justice may supplant a conservative policy agenda as the congressional contribution to the Republican cause this fall.
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