Wednesday, February 23, 2011

How the GOP Can Win the Budget Battle

How the GOP Can Win the Budget Battle

Democrats will bewail every domestic program cut. Can Republicans convince the public we can't afford to play this game any longer?

Republicans won a blockbuster victory in November's election after a campaign focused on cutting government spending and reducing debt. Then they got the bad news: Americans are leery of cutting specific programs.

These include Social Security, Medicare, Medicaid, national defense, veterans' benefits, education, highways, mass transit, unemployment benefits, agriculture and the environment. A post-election poll by YouGov/Polimetrix found that the public favors cuts only in foreign aid.

So since House Republicans decided that their 2012 budget, to be released in April, would take on a wide range of popular programs as well as entitlements, Democrats have been elated. They believe Republicans have foolishly walked into a trap.

Perhaps not. Republicans have a better chance of succeeding with an agenda of budget cuts than at any time since President Ronald Reagan pushed significant reductions through Congress in 1981. Yes, their task will be arduous—but they have grounds for optimism.

To be sure, Republicans will need to organize far more support for cuts—high-profile, high- decibel support—than they have. They must be persuasive in countering the Democratic argument that preserving individual programs is more critical to the well-being of Americans than is rolling back overall spending to keep the country from decline. And, like Reagan, they must sound positive and upbeat to offset the nation's anxious mood.

Associated Press

Rep. Paul Ryan (R., Wis.), left, and Sen. Jeff Sessions (R., Ala.)

The situation Republicans are in has been compared to the 1990s. Back then, Republicans had a mixed record of cutting spending, and fiscal issues were not front-and-center in their campaign to capture Congress in 1994. But fiscal issues (including repeal of ObamaCare) were central to their midterm campaign last year. In 1994, state and local governments were not suffering as shockingly from mounting debt as they, and Washington, are today. "It's a different day," says Bill Paxon, a key House Republican leader in the 1990s. People realize there is a fiscal crisis, he says. "It's pervasive. They know you can't kick the can down the road."

Mr. Obama has acknowledged as much, although his 2012 budget scarcely deals with the problem. By keeping cuts to a minimum and ignoring entitlements, he's all but dared Republicans to move first. Once they do, they'll be criticized for imposing cruel cuts and impeding job creation.

This age-old Democratic strategy has worked before, which is why Republicans need a political juggernaut to overcome it. The worst that can happen is a repeat of President George W. Bush's bid to enact Social Security reform in 2005. His year-long crusade attracted little support, even from Republicans.

One can imagine Paul Ryan, the chairman of the House Budget Committee and the architect of the GOP spending cuts and entitlement reforms, making the same mistake this year. To avert that, Mr. Ryan needs a broad coalition to surround his spending initiative with visible support. That would give the cuts and reforms credibility. They would look not quixotic but achievable, as they indeed are.

Sen. Ron Johnson (R., Wis.) on the budget battles in Washington and back home.

House Republicans—having united behind spending cuts for the remainder of the fiscal year 2011 budget—are ready to back Mr. Ryan's 2012 budget. But the Senate is another story. The GOP budget should get strong backing from Jeff Sessions, the ranking Republican on the Senate Budget Committee, and Minority Whip Jon Kyl. Mr. Kyl believes a handful of Democrats may be ready to vote for "a certain number" of spending cuts. If all 47 Republican senators vote for the House Republican budget, or major parts of it, only four Democrats would be required for passage.

But for now Senate Republican Leader Mitch McConnell is not fully on board. He has said repeatedly that entitlement reform "will not be done except on a bipartisan basis with presidential leadership." Such a basis doesn't exist today, but that may change. A bipartisan group of six senators—Democrats Richard Durbin of Illinois, Mark Warner of Virginia, and Kent Conrad of North Dakota, and Republicans Tom Coburn of Oklahoma, Mike Crapo of Idaho, and Saxby Chambliss of Georgia—is devising a plan to impose mandatory spending caps and corral entitlement costs in a proposal similar to the $4 billion in debt reduction urged by the president's debt commission last year. The Democrats hope Mr. Obama, who declined to endorse the commission's recommendation, might sign on if they reach a deal.

An indication of where the Senate may be headed occurred on Feb. 1. Nearly 40 senators from both parties gathered in the Capitol Visitors Center to listen to two hedge-fund managers, one a Democrat, the other a Republican. Their message: Soaring debt threatens growth, job creation and America's preeminence in the world. Asked what single thing Congress could do to relieve the anxiety of financial markets, their answer was "fix Social Security."

Outside of Congress, it will be easy to recruit Republican governors to promote spending cuts and an overhaul of entitlements. Many of them, such as New Jersey's Chris Christie and Wisconsin's Scott Walker, are already involved with this struggle on the state level. But the GOP will also need the active support of its presidential candidates, movement conservatives, tea party folks, libertarians and political independents.

And their message is critical. Bragging about painful but necessary cuts to Medicare scares people. Stressing the goal of saving Medicare won't. Talking about the need for austerity is a loser. The idea here is to produce prosperity. Pain isn't the issue. Relief is.

Mr. Ryan insists that he won't be deterred by bad poll numbers. But better poll results, from asking good questions, would be reassuring. Instead of asking about Medicare cuts, ask if reforms rather than tax hikes and borrowing should be used to make Medicare sustainable. Ask if billionaires should get the same Social Security benefits as the middle class. Ask if bigger deficits and more debt should be incurred to protect every individual program.

Republicans have a second objective beyond restoring proper fiscal priorities: setting the stage for electing a Republican president in 2012. With Democrats in charge of the Senate and Mr. Obama in the White House, deep spending cuts and real entitlement reform may not happen this year or next. But a serious and very public effort to get them can improve the chances of Republican presidential candidates next year.

The Democratic strategy of bewailing cuts in every domestic program has become an anachronism. The public knows there's something larger at stake. Rarely has there been a better opportunity to do the right thing for the country. And Republicans have a chance to seize it.

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