The GOP's Current Plan To Cut Spending Is a Political Failure

Posted By TheNewsCommenter: From Reason.com: “The GOP's current plan to cut spending is a political failure”. Below is an excerpt from the article.

The long and tedious battle for House speaker ended with the GOP arguably more focused on fiscal responsibility and cutting spending. To accomplish this, Republicans are demanding spending cuts in exchange for raising the debt ceiling. Asking for some future fiscal discipline before allowing Uncle Sam to borrow yet more money is well worth it, but carelessly chosen goals could derail the whole enterprise.

Congress will eventually have to pass legislation to authorize the Department of Treasury to borrow money above and beyond the current debt-ceiling level to avoid a default. Besides, when previous Congresses—both Republican- and Democratic-controlled—passed spending bills paid for with money they didn't have, legislators implicitly agreed to raise the debt ceiling as needed. But that doesn't mean that today's legislators can't demand some spending restraint going forward.

Treasury Secretary Janet Yellen has already announced that the Treasury will begin "extraordinary measures" to ensure the federal government is able to meet its payment obligations even if the ceiling isn't immediately raised. That should allow payment obligations to be met without default until early June, giving legislators time to negotiate an agreement to raise the debt ceiling. That has been done before and can be done again.

And this is the path Republicans now intend to follow, which is, in theory, great. But from the look of it, they're going about it the wrong way. According to the Manhattan Institute's Brian Riedl, the GOP plan so far is to cut $130 billion from discretionary appropriations. Unfortunately, the defense budget and veterans health funds are excluded from cuts, despite making up $993 billion out of $1,602 billion discretionary budget. As Riedl notes, their plan will require "freezing those two items and cutting everything else by 21% immediately."

This maneuver guarantees political failure for the Republicans' plan. Don't get me wrong, there's easily 21 percent worth of spending cuts to be made in programs like the National Institutes of Health, the Centers for Disease Control and Prevention, the Food and Drug Administration, and the Departments of Transportation, Education, and Energy. In fact, some of these discretionary programs should be eliminated altogether. However, imposing cuts on only a small share of the discretionary budget excludes trillions of dollars from scrutiny and is a political nonstarter.

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