Both parties claim to cut nonexistent $41 billion

James Valvo Director of Policy, Americans for Prosperity
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House Republican leaders failed their first major test about whether they will play straight with the American people — and now they’re paying the price. In an attempt to meet their Pledge to America commitment to cut $100 billion in spending in their first year, House leaders decided to compare their continuing resolution cuts to President Obama’s FY2011 budget request instead of comparing the cuts to current spending levels. This was a mistake.

Presidential budgets are a starting point each year for the discussion over spending priorities. These budgets are printed at taxpayer expense, delivered with fanfare to Capitol Hill and then summarily dismissed. Congress then goes about its business passing a framework budget and appropriating funds under that framework. That process fell apart last year when Democrats were so obsessed with Obamacare that they failed to pass a budget for the first time in modern history.

Speaker Boehner led the new House GOP majority into office on January 5th saying, “hard work and tough decisions will be required of the 112th Congress.” But first the new budget hawks had to clean up after the Democrats. In two months the temporary continuing resolution would expire, and the media, GOP freshman and a wide swath of voters would be looking for spending cuts. The Pledge to America stated Republicans intended to “roll back government spending to pre-stimulus, pre-bailout levels, saving at least $100 billion in the first year alone.” This $100 billion was calculated by comparing current FY2010 non-defense, non-security discretionary spending to the same categories in FY2008.

Daunted by the task of getting the cuts past the Senate Democrats and President Obama, House leaders offered an explanation for why they shouldn’t be held to the $100 billion number. They reminded us that they promised to return to FY2008 pre-stimulus, pre-bailout spending levels. This would have been $100 billion in cuts if the ’08 levels were used for the entirety of FY2011. But since Republicans didn’t take control of the House until halfway through the fiscal year, if they returned to ’08 levels in January, the cuts would have been about $60 billion. This is a perfectly defensible position and one they should have stuck to. However, the longer it took Congress to pass the CR, the smaller the spending cut would be because less of FY2011 would be reduced to FY2008 levels. This perverse incentive for big spenders to drag their feet and keep spending high was enough to drive House Leadership off this tact.

Acutely aware of the combined power of the media on the left and Tea Party activists on the right attacking the Republicans, as the number shrank Speaker Boehner and Budget Committee Chairman Paul Ryan decided to shoot for the $100 billion in cuts. In an effort to reach the higher number, they bizarrely decided to compare their cuts to the president’s budget request, a number that is irrelevant except for political spin.

The gap between what the president wanted to spend on non-defense, non-security discretionary spending in FY2011 and what the country is currently spending on those areas is approximately $41 billion. Meaning Obama’s so-called budget freeze was still $41 billion higher than the actual FY2010 spending levels. This difference allowed the House to claim a false $41 billion head start toward its $100 billion goal.

Chairman Ryan’s initial proposal cut $74 billion compared to the president’s FY2011 request, but it only cut $33 billion from current levels. The House GOP freshman balked at this proposal. Appropriations Committee Chairman Hal Rogers responded with a beefed-up proposal that would have cut $102 billion from Obama’s request but was only $61 billion below current levels. Note the $41 billion gap in both proposals. Speaker Boehner demanded an open floor process, and hundreds of amendments later the $61 billion in cuts was approved by a vote of 235-189.

The response on the left was predictable. Minority Leader Nancy Pelosi derided the GOP for passing a bill that “destroys jobs, weakens the middle class, hurts schools and young adults, eliminates assistance to homeless veterans, and diminishes critical investments in our future,” all in response to a 1.7 percent cut from $3.6 trillion in federal spending.

The House-passed CR went to the Senate, where it unceremoniously died; all except the $41 billion talking point. The spending triumvirate in the Senate latched onto the GOP’s error. Majority Leader Harry Reid stated: “Senate Democrats are pursuing a responsible approach to deficit reduction: $41 billion in cuts below the president’s budget request and a five-year spending freeze.” Senator Chuck Schumer urged both chambers to maintain the $41 billion in cuts in the short term while a long-term CR is finalized. Senator Dick Durbin also proffered that Congress had already cut $41 billion.

But the federal government is already running $41 billion below the president’s request in those categories. No one cut even one thin red dime; all that happened was a timid House GOP handed Senate Democrats a political talking point.

The continuing resolution runs out on March 4, and both parties appear determined to avoid a shutdown. That is good news. Chairman Rogers released a two-week CR to give both sides more time to negotiate the final FY 2011 spending levels. The short-term CR cuts $4 billion from programs and earmarks. But more important than the size of the cut is that the House Leadership is comparing it to current spending, not some stale presidential budget request that no one really cares about.

James Valvo is director of government affairs at Americans for Prosperity.