The Budget Battle Favors the GOP

The Budget Battle Favors the GOP

BY ANDREW STILES

For a Republican party still reeling from November’s defeat and hoping to regain some confidence, the upcoming midterm cycle looks especially promising, and many are optimistic that the ongoing budget debate has the potential to drive electoral gains in 2014.

This week, the Republican House and Democratic Senate are expected to pass competing budget proposals. Both sides will claim to have endorsed “balanced” plans — Republicans because their budget reaches balance in ten years, Democrats because theirs raises taxes by $1 trillion.

Republicans already know what to expect. Democrats have spent nearly two years on the offensive against Paul Ryan’s “extreme ” budgets, yet House Republicans have maintained their majority while honing their defenses. The National Republican Congressional Committee has been quietly polling competitive districts, where balancing the federal budget is very appealing, even among Democrats.

On the Senate side, Democrats have finally authored a budget proposal for the first time in nearly four years, providing Republicans with a concrete alternative to run against. Senate Democrats haven’t voted for any budget during that period, even unanimously rejecting each and every budget offered by President Obama. The sketchy plan they have at long last put forward is a case study on why they have been so reluctant to put pen to paper and write a budget themselves.

The Democratic plan raises taxes by $1 trillion without explaining exactly how; increases spending by more than $600 billion, including a $100 billion stimulus package paid for by raising taxes; and adds more than $7.3 trillion to the national debt. It increases mandatory spending on entitlement programs — the biggest drivers of the national debt — by $28 billion. On spending, taxes, and entitlements, the Democratic budget is to the left of what Obama has proposed.

The usual media mouthpieces have not given it a free pass, either. In a withering critique, the Washington Post editorial board wrote that the Senate plan “gives voters no reason to believe that Democrats have a viable plan for — or even a responsible public assessment of — the country’s long-term fiscal predicament.”

Following the president’s reelection, many Democrats are feeling confident that the public generally supports their positions on budget issues. Republican aides and strategists believe that confidence is misplaced, especially heading into a midterm cycle, where turnout typically favors the GOP.

Furthermore, Senate Democrats face a challenging map in 2014. They must defend seven seats in states Mitt Romney carried last year. Several others are in contestable swing states, such as New Hampshire and Colorado. Another seat, in Minnesota, is currently occupied by a comedian. “If we play our cards right, 2014 could be a great year,” says one GOP Senate aide.

The politics of 2014 are likely to be on full display later this week, when the Senate is expected to initiate the 50-hour “vote-a-rama” process, during which lawmakers may offer unlimited amendments that cannot be filibustered. Republicans are planning to offer dozens of amendments — on spending, taxes, welfare, energy, and a host of other controversial issues — designed to make life as difficult as possible for vulnerable Democrats. As one GOP aide told National Review Online: “It’s going to become abundantly clear why Democrats have avoided this process for so long.”

Majority Leader Harry Reid (D., Nev.) is already seeking to limit debate on the budget. Republicans expect him to “cut loose” four of his most vulnerable incumbents — perhaps Mark Pryor (Ark.), Kay Hagan (N.C.), Mark Begich (Alaska), and Max Baucus (Mont.) — by letting them vote against the budget — an indication of how Democrats think voters in those states may respond. Reid cannot afford any more defections if he wants the budget to pass; so some red-state Democrats will have to support the plan and be prepared to defend it.

Republicans will be ready to pounce. “This is a budget for people who think Washington is spending taxpayer dollars wisely,” says Brad Dayspring, communications director for the National Republican Senatorial Committee. “It’s going to be pretty hard for these Democrats, especially in red states, to make that case.”

By proposing a budget, Senate Democrats have opened themselves up to many of the same types of attacks they have levied against Republicans for years. After repeatedly criticizing the vagueness of GOP tax-reform proposals, Democrats have authored their own fuzzy-on-the-details plan. The same Washington Post editorial that painted the Democrats as complacent also slammed their budget as “woefully imprecise” for offering a blanket assertion that it would affect only the “wealthiest Americans” and the “biggest corporations.” History shows that Democrats have been unable to agree on an appropriate definition of “wealthy.”

“It’s revealing that there is not more policy detail,” says Douglas Holtz-Eakin, former director of the Congressional Budget Office and president of the American Action Forum. “Can they do it and only hit the rich? That’s going to be tough, certainly harder than people admit.”

According to the Joint Committee on Taxation, there are few, if any, major tax expenditures that “disproportionately” benefit the rich, as Democrats claim. Many, such as the mortgage-interest deduction, the property-tax deduction, the child tax credit, and the earned-income tax credit, are heavily, and in some cases entirely, weighted toward the non-wealthy.

To be fair, the Democratic budget does cite the so-called corporate-jet loophole as a specific target for elimination, but that would raise less than $300 million a year in new revenue, or about 0.3 percent of the total that Democrats are looking to achieve. Democrats and the White House have often employed this loophole as a talking point on spending issues, yet it was not included in the Senate Democrats’ recent plan to avert the sequestration spending cuts.

Broadly speaking, the two “key principles” cited in the Democratic plan are telling: first and foremost, to “restore fairness to our tax code,” and second, to “boost economic growth and job creation.” This emphasis on fairness over economic growth, experts suggest, will almost certainly lead to highly inefficient results. The Heritage Foundation, for example, estimates that when accounting for the negative impact on economic growth, the Democratic budget would raise only 57 percent of the tax revenue it assumes.“High corporate taxes harm job creation, which hurts the economy, and then who really pays?” Holtz-Eakin asks. “The middle class.”

The Hill released a poll on Monday showing that likely voters may be inclined to agree with Republicans on the budget. By a large margin, 55 to 28 percent, respondents favored an approach more in line with the GOP plan. The same poll showed, however, that Republicans still have work to do rebuilding their brand: “As soon as respondents heard the words ‘Republican’ and ‘Democrat,’ the picture changed drastically. A plurality of voters, 35 percent, said they trust Democrats more on budgetary issues, while 30 percent said they trust Republicans more. A full 34 percent said they trust ‘neither’ party.”

Republicans have already begun the process of trying to reestablish that trust, which will take time. But at least as far as the budget debate is concerned, as one GOP aide explains: “We’re just happy we’re not debating ourselves anymore.”

— Andrew Stiles is a political reporter for National Review.

 

The Budget Battle Favors the GOP

BY ANDREW STILES

For a Republican party still reeling from November’s defeat and hoping to regain some confidence, the upcoming midterm cycle looks especially promising, and many are optimistic that the ongoing budget debate has the potential to drive electoral gains in 2014.

This week, the Republican House and Democratic Senate are expected to pass competing budget proposals. Both sides will claim to have endorsed “balanced” plans — Republicans because their budget reaches balance in ten years, Democrats because theirs raises taxes by $1 trillion.

Republicans already know what to expect. Democrats have spent nearly two years on the offensive against Paul Ryan’s “extreme ” budgets, yet House Republicans have maintained their majority while honing their defenses. The National Republican Congressional Committee has been quietly polling competitive districts, where balancing the federal budget is very appealing, even among Democrats.

On the Senate side, Democrats have finally authored a budget proposal for the first time in nearly four years, providing Republicans with a concrete alternative to run against. Senate Democrats haven’t voted for any budget during that period, even unanimously rejecting each and every budget offered by President Obama. The sketchy plan they have at long last put forward is a case study on why they have been so reluctant to put pen to paper and write a budget themselves.

The Democratic plan raises taxes by $1 trillion without explaining exactly how; increases spending by more than $600 billion, including a $100 billion stimulus package paid for by raising taxes; and adds more than $7.3 trillion to the national debt. It increases mandatory spending on entitlement programs — the biggest drivers of the national debt — by $28 billion. On spending, taxes, and entitlements, the Democratic budget is to the left of what Obama has proposed.

The usual media mouthpieces have not given it a free pass, either. In a withering critique, the Washington Post editorial board wrote that the Senate plan “gives voters no reason to believe that Democrats have a viable plan for — or even a responsible public assessment of — the country’s long-term fiscal predicament.”

Following the president’s reelection, many Democrats are feeling confident that the public generally supports their positions on budget issues. Republican aides and strategists believe that confidence is misplaced, especially heading into a midterm cycle, where turnout typically favors the GOP.

Furthermore, Senate Democrats face a challenging map in 2014. They must defend seven seats in states Mitt Romney carried last year. Several others are in contestable swing states, such as New Hampshire and Colorado. Another seat, in Minnesota, is currently occupied by a comedian. “If we play our cards right, 2014 could be a great year,” says one GOP Senate aide.

The politics of 2014 are likely to be on full display later this week, when the Senate is expected to initiate the 50-hour “vote-a-rama” process, during which lawmakers may offer unlimited amendments that cannot be filibustered. Republicans are planning to offer dozens of amendments — on spending, taxes, welfare, energy, and a host of other controversial issues — designed to make life as difficult as possible for vulnerable Democrats. As one GOP aide told National Review Online: “It’s going to become abundantly clear why Democrats have avoided this process for so long.”

Majority Leader Harry Reid (D., Nev.) is already seeking to limit debate on the budget. Republicans expect him to “cut loose” four of his most vulnerable incumbents — perhaps Mark Pryor (Ark.), Kay Hagan (N.C.), Mark Begich (Alaska), and Max Baucus (Mont.) — by letting them vote against the budget — an indication of how Democrats think voters in those states may respond. Reid cannot afford any more defections if he wants the budget to pass; so some red-state Democrats will have to support the plan and be prepared to defend it.

Republicans will be ready to pounce. “This is a budget for people who think Washington is spending taxpayer dollars wisely,” says Brad Dayspring, communications director for the National Republican Senatorial Committee. “It’s going to be pretty hard for these Democrats, especially in red states, to make that case.”

By proposing a budget, Senate Democrats have opened themselves up to many of the same types of attacks they have levied against Republicans for years. After repeatedly criticizing the vagueness of GOP tax-reform proposals, Democrats have authored their own fuzzy-on-the-details plan. The same Washington Post editorial that painted the Democrats as complacent also slammed their budget as “woefully imprecise” for offering a blanket assertion that it would affect only the “wealthiest Americans” and the “biggest corporations.” History shows that Democrats have been unable to agree on an appropriate definition of “wealthy.”

“It’s revealing that there is not more policy detail,” says Douglas Holtz-Eakin, former director of the Congressional Budget Office and president of the American Action Forum. “Can they do it and only hit the rich? That’s going to be tough, certainly harder than people admit.”

According to the Joint Committee on Taxation, there are few, if any, major tax expenditures that “disproportionately” benefit the rich, as Democrats claim. Many, such as the mortgage-interest deduction, the property-tax deduction, the child tax credit, and the earned-income tax credit, are heavily, and in some cases entirely, weighted toward the non-wealthy.

To be fair, the Democratic budget does cite the so-called corporate-jet loophole as a specific target for elimination, but that would raise less than $300 million a year in new revenue, or about 0.3 percent of the total that Democrats are looking to achieve. Democrats and the White House have often employed this loophole as a talking point on spending issues, yet it was not included in the Senate Democrats’ recent plan to avert the sequestration spending cuts.

Broadly speaking, the two “key principles” cited in the Democratic plan are telling: first and foremost, to “restore fairness to our tax code,” and second, to “boost economic growth and job creation.” This emphasis on fairness over economic growth, experts suggest, will almost certainly lead to highly inefficient results. The Heritage Foundation, for example, estimates that when accounting for the negative impact on economic growth, the Democratic budget would raise only 57 percent of the tax revenue it assumes.“High corporate taxes harm job creation, which hurts the economy, and then who really pays?” Holtz-Eakin asks. “The middle class.”

The Hill released a poll on Monday showing that likely voters may be inclined to agree with Republicans on the budget. By a large margin, 55 to 28 percent, respondents favored an approach more in line with the GOP plan. The same poll showed, however, that Republicans still have work to do rebuilding their brand: “As soon as respondents heard the words ‘Republican’ and ‘Democrat,’ the picture changed drastically. A plurality of voters, 35 percent, said they trust Democrats more on budgetary issues, while 30 percent said they trust Republicans more. A full 34 percent said they trust ‘neither’ party.”

Republicans have already begun the process of trying to reestablish that trust, which will take time. But at least as far as the budget debate is concerned, as one GOP aide explains: “We’re just happy we’re not debating ourselves anymore.”

— Andrew Stiles is a political reporter for National Review.