Political reality and GOP survival in Obama’s second term

President Obama

President Obama (Andrew Harrer / Bloomberg)

Conservatives, at least responsible ones, are facing up to three facts: the country’s fiscal situation, the president’s refusal to address entitlement reform and their own limited power.

As to the first, Rep. Paul Ryan (R-Wis.) has helped shepherd through two budgets that address the fiscal train wreck we face. The Senate would not pass its own, let alone sign onto the House budgets. Our fiscal predicament has therefore worsened.  A recent General Accounting Office report summarizes the reality that motivate Ryan and other Republicans:

[A]bsent policy changes. . . the federal government continues to face an unsustainable fiscal path. The oldest members of the baby-boom generation are already eligible for Social Security retirement benefits and for Medicare benefits. Under these projections, spending for the major health and retirement programs will increase in coming decades as more members of the baby-boom generation become eligible for benefits and the health care cost for each enrollee increases. Over the long term, the structural imbalance between spending and revenue will lead to continued growth of debt held by the public as a share of GDP; this means the current structure of the federal budget is unsustainable.

So we have a really, really big fiscal problem. It won’t be solved by getting the rich to pay “a little more.” And it won’t be solved by spending more on new projects. (Send everyone to college! High-speed trains!) Only through a combination of economic growth and restructured entitlement programs can we get our fiscal house in order.

The next inconvenient fact is in budget after budget and in multiple negotiations, the president has talked vaguely about entitlement adjustments but never laid out publicly in concrete form what he would agree to, let alone used political capital to push these ideas through. He’s not interested in down-sizing government; it is not why he sought the presidency. Those who thought he would morph into a fiscal grown-up were wrong. There is no willing partner in the White House for bipartisan reform, and the Senate Democrats remain cowering under their desks, afraid to vote on a budget or get behind any particular entitlement reduction plan.

Then we come to the political reality that we have written about, that Ryan has spoken about and that many, if not most, House and Senate members appreciate since the “fiscal-cliff” haggling. There is no better summation than Charles Krauthammer’s: “The debt-ceiling deadline is coming up. You can demand commensurate spending cuts, the usual, reasonable Republican offer. But you won’t get them. Obama will hold out. And, at the eleventh hour, you will have to give in as you get universally blamed for market gyrations and threatened credit downgrades. . . . Republicans should simply block what they can. Further tax hikes, for example. The general rule is: From a single house of Congress you can resist but you cannot impose.”

While they hold the line on spending House and Senate Republicans should not neglect a growth message, even if the president is unwilling to go along. The GOP needs a growth agenda for 2014, just as it needed a Medicare reform plan going into 2010. This involves tax reform, regulatory reform, breaking up the big banks, expanded trade and domestic energy production. Both long-term management of our entitlement obligations and a pro-growth agenda are needed to get us out of the economic doldrums, increase incomes and produce more revenue. The president has absolutely no pro-growth agenda; the GOP must have one.

These inescapable factors suggest that the GOP do the following: 1) Delink the debt ceiling from entitlement reforms; 2) Make the Democrats carry their weight on raising the debt ceiling (e.g., no GOP votes in the Senate); 3) Pass a budget with meaningful debt reduction; 4) Try to force the Senate to pass its own budget (by, as Krauthammer suggests, linking that to a debt-ceiling deal or by dint of ongoing pressure); 5) Reiterate their fiscal-sobriety message but then pivot to banging on a pro-jobs, pro-growth agenda (which the president will rebuff) and 6) Use all of the above to try to recapture the Senate in 2014.

This sounds pretty limited, right? The lesson: Stop losing elections. It really messes up your ability to run the country.

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