Sunday, January 06, 2013

A Quarter of the Economy Isn't Nearly Enough

In case you were wondering if President Obama believes that government is too big?
What stunned House Speaker John Boehner more than anything else during his prolonged closed-door budget negotiations with Barack Obama was this revelation: "At one point several weeks ago," Mr. Boehner says, "the president said to me, 'We don't have a spending problem.' "


The president's insistence that Washington doesn't have a spending problem, Mr. Boehner says, is predicated on the belief that massive federal deficits stem from what Mr. Obama called "a health-care problem." Mr. Boehner says that after he recovered from his astonishment—"They blame all of the fiscal woes on our health-care system"—he replied: "Clearly we have a health-care problem, which is about to get worse with ObamaCare. But, Mr. President, we have a very serious spending problem." He repeated this message so often, he says, that toward the end of the negotiations, the president became irritated and said: "I'm getting tired of hearing you say that." 
Then it needs to be repeated to him even more often.

If the Speaker sticks to what he tells the WSJ's Stephen Moore in this interview, there may be good news for those who believe we do have a spending problem.
Where does the fiscal debate go from here? The speaker is adamant on two points: First, Republicans won't be agreeing to any more tax increases during the next two years. "The tax issue is resolved," he says, and it will be discussed only in the context of a broader debate about tax reform—specifically, lower rates. He dismisses the president's declaration that any future budget cuts will have to be "balanced" with more tax hikes.

Second, Mr. Boehner says he won't engage in any more closed-door budget negotiations with the White House, which are "futile." He adds: "Sure, I will meet with the president if he wants to," but House Republicans will from now on proceed with establishing a budget for the year following what is known as "regular order," and they will insist that Harry Reid and Senate Democrats pass a budget—something they haven't done in nearly four years—before proceeding.
The underlying reason that we've had these battles to the brink several times in the last few years is because the Senate under Harry Reid's leadership continues to shirk its legal duty to pass a budget. Because of that the government must be funded through short-term spending resolutions, each of which creates one of these stand-offs.

The likely reason Reid refuses to abide by the law and have his body pass a budget is that he wants to save vulnerable members of his caucus from going on record supporting the massive (deficit) spending it would include. Instead he gets to grandstand every few months and blame the Republicans for causing whatever crisis he and his colleagues have created.

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