Ask Republicans what the House’s biggest accomplishment has been since the GOP won the majority in 2010 and most will say the Budget Control Act of 2011. It was the first significant budget discipline enforced in decades, it brought down deficits in the short term and it effectively stymied new liberal spending schemes. But its negative consequences for the country and the GOP suggest it has outlived its usefulness.
The most damaging result of the BCA was the substantial cuts in the military, cuts that two secretaries of defense have warned were irresponsible and dangerous. Readiness has suffered. We are failing to update weapons systems. We are shrinking the Navy at an alarming rate. This in turn has contributed to the international impression that the United States has neither the will nor the ability to assert itself. Recall that the military underwent real cuts during Secretary of Defense Robert Gates’s tenure before the sequester. While China is accelerating its spending, we are cutting away. No wonder China becomes more aggressive with each passing year.
In failing to prioritize federal spending, the deal only cemented the notion that defense spending is the same as housing spending. In fact, the federal government’s first and exclusive responsibility is national defense.
Thomas Donnelly and Gary Schmitt of the American Enterprise Institute wrote recently whereas even Jimmy Carter, after the Soviet invasion of Afghanistan “moved to restore the sinews of America’s weakened armed forces, today we adhere to the constraints of a Budget Control Act that is steadily eviscerating a battle-tested professional force. Carter, in the final year of what would prove to be a single term as president, took steps to create new options for future commanders-in-chief. Barack Obama, with three years left, appears resolutely committed to foreclosing American military options.” Maybe that is by design, but Congress — as we saw from the House budget passed this year — is seeking to restore some defense spending, a recognition that the across-the-board cuts were excessive.
The other downside of the budget act was to re-enforce the myth that we can solve our fiscal problems by slashing discretionary spending. This is rotten math, rotten policy and, for the GOP, rotten politics. AEI’s Arthur Brooks commented last week in a podcast:
One of the hardest things to be confronted with as a politician is to talk about the subject of entitlements. You know, it’s funny. All of the back and forth that we have in Washington, DC, about food stamps and farm subsidies and Ex-Im Bank and all this stuff, and little legitimate things to be worried about, of course, and to debate, but those are pennies. You want those dollars, you’ve got to look at entitlements, Medicare, Medicaid, and Social Security. And if you don’t reform those things, they’re going to eat our whole budget and our country will be in decline. . . . We can afford to take care of the poor and we can afford to cut a lot of government spending. . . . so that we can have more economic growth, that we create the jobs that would help the poor at the same time.
As Brooks argues, reining in entitlement payments leaves plenty of room to cut useless government spending and to expand programs that actually encourage work and lift people out of poverty, like the income tax credit. Republicans have slapped themselves on the back for a few years now, but the discretionary savings from the BCA are a mirage; soon entitlement spending will swamp any savings and we’ll be back on the tract to insolvency. Failing to distinguish between types of government spending has also fed into the narrative that Republicans are anti-government and indifferent to the poor. But modern conservatism has never been about “every man for himself” and indiscriminate reduction in government. The core of modern conservatism and the goal of those who favor limited government is to have the federal government do what only it can do while allowing the private sector to flourish and states and localities to do many other things, albeit with some federal monies (e.g. block granting).
In short, Republicans have become budget fanatics when they should be reform fanatics. That means reforming the big entitlement plans that disproportionately help upper-income voters, restoring defense to match our international threats, reforming programs to help the poor so they encourage work and allowing states the latitude (on Medicaid, for example) to reduce costs and improve quality by innovative reforms such as the ones we’ve seen in Ohio, Wisconsin and Indiana. And it means reforming other policies to encourage growth, spur investment and nurture innovation. This requires looking again at our tax, immigration and regulatory policies, but also spending on items like basic research. If successful, the economic growth and resulting hike in tax revenues will in turn help bring down the debt.
This is not only good policy, it is good politics. And it is the moral thing to do. Brooks reminded us:
[Economist Friedrich] Hayek, in “The Road to Serfdom” said that basically the government is supposed to do two things. Number one is to be able to provide a general level of support to people who are truly indigent. He understood that that creates a headwind on the economy, but it’s a morally justifiable thing to do. And the second thing was to clear up market failures. So the canonical sources of market failures are monopolies and externalities and public goods problems and information asymmetries or things like crime. . . .
I mean the idea that somehow as a rich society we should not provide an adequate safety net for the indigent mentally ill, for the homeless, for people who are having a hard time feeding their children – that’s what I think is insane. Now, there is a legitimate charge that that can turn into a hammock and disincentivize people from supporting themselves. I completely understand that. And that is something we have to be on the guard about. But to say that it’s a slippery slope and so, therefore, we should be downgrading the benefits from people who are truly hard up in the wake of the greatest recession we’ve had since the Great Depression in this country, I don’t think that’s justifiable. I don’t think Americans agree with it. I think it’s a political loser and it’s something that morally I don’t think that we should be able to have to stand behind.
Republicans should lead the way in righting our fiscal ship of state, not by cutting across the board but by putting our security and enhanced mobility front and center. That doesn’t fit on a bumper sticker and libertarians will grouse that this is capitulation to “big government.” But let’s get real: Big government is going to be with us for the foreseeable future so let’s at least make the big government a government that attends to national security, promotes economic prosperity and lifts up the indigent.