Why the Boehner-Obama budget deal may not be as bad as it seems

"Peace, I'm outta here." (AP Photo / Pablo Martinez Monsivais )

“Peace! I’m outta here.” (AP Photo / Pablo Martinez Monsivais )

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.

Reader Comments 0

54 comments
lvg
lvg

LBB:  """You correctly note that "Freedom" and "Anti-Obama" are synonymous.""" Therein lies the hypocrisy and inability to govern of the Anarchy Caucus.  What they call freedom others call obstruction of Congress and anarchy. They do not answer to their Constitutuional duties but rather take commands from their masters on the far right.

RoadScholar
RoadScholar

" Ryan should have more latitude to pursue reforms to entitlements as well as the tax code. "

Then stop giving tax breaks to the rich and big business! And you wonder why the deficit is rising?

Hedley_Lammar
Hedley_Lammar

@LilBarryBailout @RoadScholar They benefit greatly from capital gains taxes being so low.


Its the reason why Romney pays such a low tax rate.


SS is capped so after 125,000 ( not sure if that is the exact number ) they don't pay in anymore. 


There are others. The American economy is geared to redistribute wealth up. Has been for awhile now. 

Kyle_Wingfield
Kyle_Wingfield moderator

@Hedley_Lammar "They benefit greatly from capital gains taxes being so low."

They can send a thank-you note to Bill Clinton for that.

straker
straker

MH SMITH  - "Social Security benefits"


Your point?

FIGMO2
FIGMO2

Works for me, Kyle. To bend is not to break.

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.

Amen to ^^^ that! Haste do make waste.

For those voters who choose to abandon their GOP candidates, be they congressional or senatorial, they'll be paving the way for democrats across the board. Then what?

I prefer the stealth approach after the long haul. 

RafeHollister
RafeHollister

@FIGMO2 Entitlement reform and tax code revision, how long have we heard about those.  Ryan has been the Chairman of Ways and Means since 2010, what was he waiting on?  Now more promises!  The GOP has made a great deal of unfulfilled promises, but I will continue to vote for those promises over the ones the Dems trot out every 4 years, not much choice.

McGarnagle
McGarnagle

Recognizing short-term and long-term goals and being able to accomplish both. Sounds reasonable. Looks like though 2016 is going to be a wash for republicans. Better look ahead to 2018. 

WhyorWhyNot
WhyorWhyNot

Kyle, I've read a few of your columns over the last week or so, and you are the most reasonable Conservative I've ever heard of. If you were just a little higher-profile, they would be calling you a RINO and voting you off the island. The Freedom (Anti-Obama) Caucus would be calling you an Obama-lover (imagine what they would have called you 50 years ago).

LogicalDude
LogicalDude

See what actual compromise does?  It's great!  


Now, if the staggering immobility of the "Party of No" kept going, compromises like this can't happen.  Glad there were some adults in the room who are still able to compromise. 

LilBarryBailout
LilBarryBailout

"[SSDI] eligibility requirements will be tightened and work promoted among Americans who could actually be in the labor force"

---------

And we know from prior experience that Obama would never do anything to restrict eligibility or undermine the work requirements of this or that handout program.

Laurie1113
Laurie1113

A little more rope to hang ourselves.  We are the next Greece.

Hedley_Lammar
Hedley_Lammar

@Laurie1113 Nothing could be further from the truth.


Although ill admit it does make a convenient talking point. Especially for the low info crowd


Their debt as a percentage of their GDP is MUCH higher than ours.


Which makes it an apples to oranges comparison. Let me know when our economy is dependent on olive trees.

M H Smith
M H Smith


“Each day,10,000 "baby boomers retire" and begin receiving Medicare and Social Security benefits.”


–Sen. Rob Portman (R-Ohio), writing in The Wall Street Journal, July 22, 2014


https://www.washingtonpost.com/news/fact-checker/wp/2014/07/24/do-10000-baby-boomers-retire-every-day/



Social Security Basic Facts


October 13, 2015


In 2015, over 59 million Americans will receive almost $870 billion in Social Security benefits.


June 2015 Beneficiary Data :



1) Retired workers39.5 million$53 billion$1,335 average monthly benefit


2)dependents3 million$ 2 billion


3) Disabled workers9 million$10.5 billion$1,165 average monthly benefit


4)dependents2 million$ .7 billion Survivors6.1 million$ 6.7 billion



https://www.ssa.gov/news/press/basicfact.html


RafeHollister
RafeHollister

@M H Smith That 10,000 number is bogus, it is based on how many were born on a day years ago.  Many (housewives, yeah they didn't work back in the 60's, disabled, sick, etc)  never worked, many died, many retired before now, etc.  The correct number has been reported at between 7-8,000 or so.  Obama's regime uses the 10,000 to excuse the labor participation rate.

Hedley_Lammar
Hedley_Lammar

@RafeHollister @M H Smith The correct number has been reported at between 7-8,000 or so.


So 8,000 retire each day. Does Not change the fact that Labor Participation rates hit record highs in the 90's because of boomers. And now we are settling back into historical norms.


When Republicans complain about the participation rates they are comparing today vs the 90's Cherry picking an extreme outlier. It isn't honest and they know it. 

Kyle_Wingfield
Kyle_Wingfield moderator

@Hedley_Lammar And when you insist the change in participation by 25- to 54-year-olds is because of boomers, you aren't being honest and you know it.

Hedley_Lammar
Hedley_Lammar

@Kyle_Wingfield Yes the rate of 25 - 54 year olds participating has fallen. Just like it has every decade since the 40's

M H Smith
M H Smith

@RafeHollister @M H Smith


Did you read the article? It was fact checked. You are wrong as was Kyle. The rate of people retiring is affecting the employment numbers. Even it was 7-8,000  which you offered nothing to even back that statement up but your comment, it would still  be enough to impact the numbers not to mention the after part of Kyle's claim or implied  that Medicare disability claims is a large number than Regular Social Security claims which on is not the case.



Kyle_Wingfield
Kyle_Wingfield moderator

@M H Smith "The rate of people retiring is affecting the employment numbers."

The employment numbers for 25- to 54-year-olds? No, it's not.

Hedley_Lammar
Hedley_Lammar

@Kyle_Wingfield @Hedley_Lammar The rates in the 40's were extremely high and its been on a downward trend every since.


To pretend all these trends just started when Obama took office just inst accurate.

Kyle_Wingfield
Kyle_Wingfield moderator

@Hedley_Lammar Tell you what: Click the link above, adjust the time frame so it goes back to 1948, and take a picture if you find anything that matches what you keep claiming.

Hint: You won't, because you're dead wrong.

Hedley_Lammar
Hedley_Lammar

@RafeHollister @Hedley_Lammar @M H Smith The point is the labor participation rate ballooned in the 90's ( For all demographics ) and is NEVER going back to those levels. Making comparisons to such is pointless.


Whether its 8,000 10,000 or 7,345 each day. 

straker
straker

So, a significant number of people are sitting at home collecting Social Security disability when they could be working?


And, this number is so great it significantly affects the labor-force participation number?


Who knew?

lvg
lvg

Agreed with Kyle- so how will the looney caucus and the Georgia tea heads in the House vote?Ryan will ensure stupid party remains the party of stalemate as its goal.

Juanx
Juanx

"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".


This will give Ryan the ability to get a manicure and pedicure on his on dime, rather than fighting the Tin Hat Tea Party. The people win this time.

M H Smith
M H Smith

 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.



Prove it!

M H Smith
M H Smith

The "Anarchy Caucus" was a good name for the "loony libertarian fringe" of 40.


Military spending priority number one, "FOR THE REST OF US" zero.  

Hedley_Lammar
Hedley_Lammar

@M H Smith Medicaid expansion....nah


Millions for Go Fish Georgia !!!! that nobody visits


Why yes.... There is a pattern here. 

LilBarryBailout
LilBarryBailout

@M H Smith

National defense is an actual federal government responsibility.  Handouts to folks who can't be bothered to provide for themselves are not.

Hedley_Lammar
Hedley_Lammar

@LilBarryBailout @M H Smith The people who get those handouts most often need the help.


Most poor people work several jobs to make ends meet. 


And yes providing for the common welfare is a federal responsibility. 

LilBarryBailout
LilBarryBailout

@Hedley_Lammar @LilBarryBailout @M H Smith

Funny how the Founding Fathers disagreed with you, and somehow forgot to establish any handout programs.  I do get a laugh whenever I hear your argument...I guess I shouldn't take such pleasure in the misfortunes of low-info folks like you.

RafeHollister
RafeHollister

This is just more capitulation to Obama from the original False Prophet himself.  In his Pledge to America in 2010, ole John promised to shrink government, reduce spending, and give everyone 72 hours to read legislation before it was voted on.  He then had the audacity and hypocrisy to accuse newly elected Representatives of being "False Prophets".


They have decided that kicking the can down the road and having to revisit the kick frequently was tiresome, so they kicked the can into a boxcar headed left and where it shows up again is anyone's guess.  The best thing they stumbled into was sequestration and this sets a precedent for overriding that budget control feature.  The surrender caucus has prevailed as their big money donors had encouraged them to.  The donors have control over the mainstream of both parties and just dictate to them to continue the status quo as it is good for business.  Government disruptions are bad for business.


I guess Boehners options were few, so he took the easy way out.  When you haven't done you job of getting budgets and appropriations passed in a timely manner, this is where you wind up.   They have been so busy working on what exactly, the Iran capitulation, Obamatrade, the crony XM bank deal for their donors, or what.  They work three day weeks occasionally when they aren't tied up meeting with lobbyists and donors, or vacationing.  I don't think this deal is going to be a boon to motivating and exciting the voters to get out and elect GOP candidates, because it is a perfect demonstration of the futility of doing so.

Juanx
Juanx

@RafeHollister ...yea! The government won't be shut down. The GOP can visit all of the national parks with their families. And other stuff, managed by the government.

Finn-McCool
Finn-McCool

@RafeHollister But having fights and temper tantrums in the midst of an election year wouldn't help your cause either. I think they are making the smart play.

RafeHollister
RafeHollister

@Finn-McCool @RafeHollister Sincerity and enthusiasm for a goal motivates others of a like mind.  Indifference, capitulation, and procrastination usually produce more of the same.