CommunityFDL Main Blog

Republicans May Not Care About Deficits, But They Care About Cutting Social Spending

Republicans can't wait to put their scissors to work on social spending. (photo: sociotard on Flickr)

It’s tempting to just laugh at the hapless Republicans who are flailing away at their initial promises, and to conclude that they don’t care about the deficit. This is all true, and they don’t. But that doesn’t mean they won’t engage in very consequential spending cuts.

There’s no question that the new House rules allow for broad exemptions on deficit-busting legislation, particularly the repeal of health care. As Harry Reid said today in a statement, the repeal bill would cost $235 billion over the first ten years, and $1.3 trillion in the next ten, with the cost of repeal significantly expanding as the years go on. People would pay more for health insurance and 32 million more would be uninsured as well, but let’s confine ourselves to the budget implications. As much as the media refuses to report this, it would be a deficit buster.

Additional exemptions from other policies, put into the Senate rules, would expand the deficit by another $1 trillion dollars. In the first 24 hours, Republicans have set a course for $2.5 trillion in additional costs to the US taxpayer.

The exemptions include a bill to repeal last year’s health care legislation as well as GOP-backed proposals extending a series of tax cuts for upper income filers that are due to expire in two years, according to a tally several Senate Democrats unveiled at a midmorning new conference Thursday […]

House Republicans have made deficit reduction a cornerstone of their agenda for the next two years and passed a series of rules changes on Wednesday designed to accomplish their goal. But the rules exempt a handful of specific bills until a budget plan is in place for the fiscal year that begins Oct. 1 and leave a subsequent accounting unclear.

“If Republicans want to give millionaires a tax break, the new rules say there’s no need to cut spending to pay for it,” Schumer said. He and his colleagues voted to extend tax cuts for upper-bracket taxpayers last month as part of a bipartisan tax and spending bill — a measure that added almost $1 trillion to the deficit despite the so-called pay-as-you-go budget rule that the Democrats were criticizing House Republicans for scrapping.

The rules also exempt such items as AMT relief, the estate tax, small business tax relief and trade agreements, or revenue lost from tariff cuts. Literally everything expected to actually pass Congress these next two years that costs money is exempted from the rules Republicans enacted to pay for legislation.

However, none of this should allow anyone to let their guard down about whether fiscal policy will turn sharply negative. Republicans do not care about the deficit, but they do care about transferring wealth up the ladder to the rich. . . . Effectively, that’s what all of these exemptions are about; they allow corporate actors, insurance companies, and rich people to suck up in-kind subsidies. Something has to give in that scenario, and it will be social spending. This is what Norquistenomics is founded upon – drain the revenue from government so much that the poor have to fight the rich for government largesse, a fight the rich will win every time.

So while Republicans may not get $100 billion out of this year’s budget, they’ll try to make up for it in next year’s budget. That’s what Paul Ryan said today. Their rules conveniently make it so Ryan can set spending caps basically in the dark, and no member of Congress has to put them to a vote. Eliot Spitzer is right that the Dick Armey’s of the world are full of crap on spending, but under House rules they won’t have to ever show that. Ryan will operate in the dark, and spending above his limits will be ruled out of order.

Just look at what happened today in the House. They voted on a bill to cut Congressional staff budgets by 5%, and only 13 Democrats said no. Maybe they all figured it was good optics to show self-discipline, and that the ax should fall on their staff rather than the poor. But there’s a real acquiescence to budget-cutting going on. And some of those votes will be more than a $35 million dollar trinket.

Overall, the budget deficit will probably expand under Republican rule. But that doesn’t mean spending won’t be starved from those who really need it.

UPDATE: Here’s John Boehner saying that the debt limit increase must include spending cuts:

“The American people will not stand for such an increase unless it is accompanied by meaningful action by the President and Congress to cut spending and end the job-killing spending binge in Washington,” Boehner said in a prepared statement.

I feel like all these budget-busting exemptions are something like a trap. They will move the House to demand spending cuts to make up for the policy mess they created. That’s always the way.

CommunityThe Bullpen

Republicans May Not Care About Deficits, But They Care About Cutting Social Spending

It’s tempting to just laugh at the hapless Republicans who are flailing away at their initial promises, and to conclude that they don’t care about the deficit. This is all true, and they don’t. But that doesn’t mean they won’t engage in very consequential spending cuts.

There’s no question that the new House rules allow for broad exemptions on deficit-busting legislation, particularly the repeal of health care. As Harry Reid said today in a statement, the repeal bill would cost $235 billion over the first ten years, and $1.3 trillion in the next ten, with the cost of repeal significantly expanding as the years go on. People would pay more for health insurance and 32 million more would be uninsured as well, but let’s confine ourselves to the budget implications. As much as the media refuses to report this, it would be a deficit buster.

Additional exemptions from other policies, put into the Senate rules, would expand the deficit by another $1 trillion dollars. In the first 24 hours, Republicans have set a course for $2.5 trillion in additional costs to the US taxpayer.

The exemptions include a bill to repeal last year’s health care legislation as well as GOP-backed proposals extending a series of tax cuts for upper income filers that are due to expire in two years, according to a tally several Senate Democrats unveiled at a midmorning new conference Thursday […]

House Republicans have made deficit reduction a cornerstone of their agenda for the next two years and passed a series of rules changes on Wednesday designed to accomplish their goal. But the rules exempt a handful of specific bills until a budget plan is in place for the fiscal year that begins Oct. 1 and leave a subsequent accounting unclear.

“If Republicans want to give millionaires a tax break, the new rules say there’s no need to cut spending to pay for it,” Schumer said. He and his colleagues voted to extend tax cuts for upper-bracket taxpayers last month as part of a bipartisan tax and spending bill — a measure that added almost $1 trillion to the deficit despite the so-called pay-as-you-go budget rule that the Democrats were criticizing House Republicans for scrapping.

The rules also exempt such items as AMT relief, the estate tax, small business tax relief and trade agreements, or revenue lost from tariff cuts. Literally everything expected to actually pass Congress these next two years that costs money is exempted from the rules Republicans enacted to pay for legislation.

However, none of this should allow anyone to let their guard down about whether fiscal policy will turn sharply negative. Republicans do not care about the deficit, but they do care about transferring wealth up the ladder to the rich. Effectively, that’s what all of these exemptions are about; they allow corporate actors, insurance companies, and rich people to suck up in-kind subsidies. Something has to give in that scenario, and it will be social spending. This is what Norquistenomics is founded upon – drain the revenue from government so much that the poor have to fight the rich for government largesse, a fight the rich will win every time.

So while Republicans may not get $100 billion out of this year’s budget, they’ll try to make up for it in next year’s budget. That’s what Paul Ryan said today. Their rules conveniently make it so Ryan can set spending caps basically in the dark, and no member of Congress has to put them to a vote. Eliot Spitzer is right that the Dick Armey’s of the world are full of crap on spending, but under House rules they won’t have to ever show that. Ryan will operate in the dark, and spending above his limits will be ruled out of order.

Just look at what happened today in the House. They voted on a bill to cut Congressional staff budgets by 5%, and only 13 Democrats said no. Maybe they all figured it was good optics to show self-discipline, and that the ax should fall on their staff rather than the poor. But there’s a real acquiescence to budget-cutting going on. And some of those votes will be more than a $35 million dollar trinket.

Overall, the budget deficit will probably expand under Republican rule. But that doesn’t mean spending won’t be starved from those who really need it.

UPDATE: Here’s John Boehner saying that the debt limit increase must include spending cuts:

“The American people will not stand for such an increase unless it is accompanied by meaningful action by the President and Congress to cut spending and end the job-killing spending binge in Washington,” Boehner said in a prepared statement.

I feel like all these budget-busting exemptions are something like a trap. They will move the House to demand spending cuts to make up for the policy mess they created. That’s always the way.

Previous post

On Shame As A Tactic, Or, Betsie Gallardo: She Won...And So Can You!

Next post

Cyberwarriors Cross Swords in Tunisia

David Dayen

David Dayen