Maybe we’ve seen the end of governing by crisis in Washington.
John Boehner’s final act as speaker was to negotiate — in secret — a two-year budget deal with President Obama that also includes raising the debt ceiling through a projected March 2017. Boehner described this as a way to clean out the barn ahead of the expected rise of Paul Ryan as his replacement, and this deal also pretty much sets Washington’s fiscal path through the end of Obama’s presidency.
The deal would raise spending levels in 2016-17 by $80 billion over the caps imposed by sequestration — the result of the last deal, or rather failure to reach a deal, between Boehner and Obama. That’d be about a 1 percent increase in spending during those years, and it’s worth noting that much of the increase represents additional defense spending approved by bipartisan majorities in Congress but vetoed by Obama last week. There are some other measures designed to offset much of that spending and make it fairly deficit-neutral, although some of those are little more than old-fashioned Washington budget gimmicks (such as more IRS audits to cut down on tax fraud, although the auditors never seem to find quite as much fraud as exists, or so we’re told).
Because the spending caps are probably the most notable achievement of congressional Republicans in the divided government of the past four years, giving in on them at all is viewed by many conservatives as a sellout. Combine that with the supposed selling out by the Freedom Caucus to Ryan — who is viewed by the rest of us as a serious conservative — and a lot of folks on the right are squealing about the deal.
But the deal is best viewed through two lenses. One is the inevitable result of governing by crisis over the past few years. With Boehner unable to rely on the votes of members well to his right (including the Freedom Caucus), these matters have tended to wait until the last possible minute to be resolved. Now, the Freedom Caucus folks would tell you they’ve held out because they weren’t included in the process, and a big part of their acquiescence to Ryan is his promise to be more inclusive as speaker. But to a large extent this is a chicken-and-egg debate: Was Boehner less inclusive because he knew he couldn’t count on those members, or was he unable to count on them because they were mad about not being included? Either way, the result has not been markedly more conservative governance. And however you come down on that question, this barn-cleaning exercise arguably gives Ryan an ability to start afresh that wouldn’t have been possible otherwise.
Second, you have to put this deal in the context of the Obama presidency. As best I can tell, an apples-to-apples comparison shows annual discretionary spending will be about $290 billion less in both 2016 and 2017 than it was in 2010, Obama’s first full year in office. That’s a combined $580 billion in savings.
What’s more, Obama’s 2010 budget projected discretionary spending in 2016-17 would exceed $2.9 trillion. Under this deal, Washington will spend some $800 billion less in those years.
The deal compares well even Ryan’s to first budget for 2011, after the GOP took control of the House, which was decried by liberals everywhere as a draconian measure that would bring the country to a grinding halt and leave grandma dead in a ditch somewhere (I exaggerate only slightly). Discretionary spending under the deal will be about $126 billion less over two years than the level to which Ryan first dared to cut it.
So the arc of discretionary spending, even under this deal, remains far below what even seemed possible early in Obama’s tenure.
From here, addressing mandatory spending — the other two-thirds of the budget — is the whole shooting match. Ryan’s successor as Budget chairman, Georgia’s Tom Price, is in the middle of a campaign to drive home that point. And the new Boehner-Obama deal makes some modest progress toward that in the way of reining in Social Security’s disability insurance program. Eligibility requirements will be tightened and work promoted among Americans who could actually be in the labor force. This is a significant reason the labor-force participation rate has been falling in recent years even among those between the ages of 25 and 54 — i.e., not baby boomers hitting retirement age. The potential savings on that measure is a reported $168 billion over 10 years. That’s real money, even if it hardly scratches the surface of what needs to be done to make Social Security, Medicare and Medicaid solvent in the medium term.
With nearer-term concerns out of the way for a couple of years, Ryan should have more latitude to pursue reforms to entitlements as well as the tax code. Raising spending by $80 billion is hardly ideal. But it that turns out to be the price of positioning Ryan to achieve those much larger goals, it will have been worth it.