Over the weekend, Politico described a defining moment in this year’s budget debate. According to sources inside the White House, a frustrated Barack Obama called John Boehner on Friday morning after failing to establish an agreement on cuts to government spending. He told Boehner that “I’m the president of the United States, and you’re the speaker of the House … We are the two most consequential leaders in the U.S. government.”
In this debate, though, Boehner turns out to be the most consequential leader in the government, and unless the White House figures out how to start embracing real spending reductions, that will continue throughout the rest of President Obama’s term.
Conservatives found plenty to dislike in the eventual deal announced a few hours after this conversation. Boehner stood accused of caving on the issues of Planned Parenthood and the EPA by removing policy riders defunding both. The $39 billion in cuts hardly amount to a dent in a deficit of $1.6 trillion in this fiscal year. Even a few members of Boehner’s caucus publicly contemplated voting against the reductions when the deal comes up for a vote at the end of the week, in an attempt to get more cuts through the renewed threat of a government shutdown.
This mostly misses the point. In the first place, the FY2011 budget debate concerned only a small fraction of spending left for the rest of the fiscal year, thanks to conservative demands to protect defense and homeland security spending. Congressional budgets don’t authorize entitlement spending, but merely estimate it; that spending occurs by existing statute, which is why it’s called mandatory spending in budget documents. Congress can only cut that spending through passing statutory law. So the total dollar amount that was even up for debate was around $250 billion in non-defense discretionary spending. Boehner got a total of $39 billion in cuts, or a 15% reduction.
As critics of the deal correctly state, this doesn’t make a great deal of monetary impact on the deficit. However, Boehner’s success accomplished critical goals on the path to fiscal sanity. First, the terms of the budget debate have changed sharply since Obama won in 2008. No longer is the question whether to cut, or whether those cuts should merely be in the rate of increase in federal spending. Boehner forced Democrats to accept real and significant cuts in social programs without corresponding cuts to defense or security.
Just a few weeks ago, Democratic leadership in the Senate proclaimed that anything more than $10 billion in total cuts to the FY2011 budget proposal was too radical to be tolerated. Three weeks ago, Sen. Chuck Schumer (D-N.Y.) called them “extreme.” By Saturday, Senate Majority Leader Harry Reid (D-Nev.) bragged about the $39 billion in cuts as “historic.”
Speaking of Reid, where was he in Obama’s estimation of power in Washington? Exactly nowhere. Reid turned into a potted plant in the budget negotiations. Boehner dealt directly with the White House to get what he could and cut the deal. Reid could have forced his caucus to pass a realistic budget earlier in the year, which would have moved the debate to a conference committee and kept Obama out of it. Instead, Reid’s failure made him irrelevant. Boehner can go directly to the Oval Office in the future, making budget battles bilateral and minimizing the necessity of trading more away than he needs to reform federal spending.
Most importantly, Boehner proved that Republicans in the Tea Party era can govern effectively while reducing federal spending. Republicans finished the budget that Democrats refused to pass in 2010, when they still held all the cards, proving the GOP’s ability to succeed even while controlling only one chamber of Congress. Instead of being “extreme,” Republicans led by Boehner established a track record of competency — competency that had been lacking in Congress and the White House until the GOP took control of the House.
Republicans will need this credibility in the upcoming fight on entitlements. Now that the FY2011 budget has been settled, the House can focus on the statutory changes to programs like Medicare and Medicaid, which are necessary to seriously reduce federal spending. Like the FY2011 budget, Republicans have the only proposal on the table for that purpose, Paul Ryan’s Roadmap to Prosperity. Until now, Democrats have either scoffed at entitlement reform entirely or considered it a revenue rather than a spending problem.
Not anymore. This week, President Obama will roll out his response to the Ryan plan instead of staying on the sidelines, as he has for much of this year. His plan is expected to call for tax increases, notably the same increase on those earning $250,000 or more that Obama agreed in last December's tax compromise to postpone until 2013. However, the White House signaled this weekend that it will also include actual and significant cuts in entitlement programs, an acknowledgment that the terms of the debate have changed, and that Republican efforts to demonstrate fiscal leadership have the White House worried about their prospects in 2012.
By holding firm on budget cuts in FY2011, Boehner has set the stage for the real battle on entitlements. Not only has he established Republican credibility and competency, but for the first time, Boehner has the White House admitting that entitlement programs need significant reductions. And as a bonus, Reid has been reduced to a spectator, and the president a follower. That’s not a bad start for Boehner, even if it is only a start.