Open for Business

Open for Business
By W. James Antle, III on 4.11.11 @ 6:10AM

John Boehner is not Newt Gingrich. At the 11th hour, the speaker of the House offered President Obama a deal that would fund the federal government for the remainder of the fiscal year and avert a government shutdown. Obama and Senate Majority Leader Harry Reid took Boehner's final offer. The deadline was met just 90 minutes before parts of the government were to be shuttered.

Both sides claimed victory as considerable segments of their bases felt defeated. "This is historic, what we've done," crowed Reid. His Republican counterpart, Senate Minority Leader Mitch McConnell, concurred: "We had an opportunity tonight to decide whether we wanted to repeat history or make history." Obama lauded the bipartisan cooperation that made possible "the biggest annual spending cut in history" and proclaimed, "Today we acted on behalf of our children."

Many of the activists who helped elect Obama felt differently. "Now we're going to see what $40 billion in cuts feels like," one posted on the social networking site Twitter. "The substance of this deal is bad," complained the Washington Post's Ezra Klein. "But the way Democrats are selling it makes it much, much worse." Paul Krugman agreed, accusing Democrats of "celebrating defeat."

Not all Tea Party conservatives are enamored of the deal either. "[W]e've been asked to settle for $39 billion in cuts, even as we continue to fund Planned Parenthood and the implementation of ObamaCare," lamented Rep. Michele Bachmann (R-MN) in a statement explaining her vote against the continuing resolution. She accused many of her colleagues of "missing the mandate given us by the voters last November."

The lady has a point, said Sen. Rand Paul (R-KY): "As I have said before, there is not much of a difference between a $1.5 trillion deficit and a $1.6 trillion deficit -- both will lead us to a debt crisis that we may not recover from." Paul is another Republican no vote.

Under this deal, the deficit will actually be closer to $1.56 trillion and the cuts will amount to roughly $38.5 billion. During the lame-duck session's debate over extending the Bush tax cuts, liberals assured us that tax increases of at least $70 billion a year -- an estimated price tag on letting the cuts lapse for upper-income earners -- would have no impact on a fragile economy. Now these same liberals are warning us of the dire consequences of an additional $5.5 billion in spending cuts in the context of a $3.8 trillion budget and $15 trillion economy.

In truth, this deal will not by itself right the nation's fiscal course. And while the Republicans got their final number, $38.5 billion is a lot closer to the Democrats' starting bid of $33 billion than the GOP's $61 billion. (To say nothing of $100 billion.) The question is what comes next.

Democrats were prepared to lambaste Republicans for shutting down the government over social issues, relying on the mainstream media to portray Planned Parenthood as a totally harmless public health organization with little connection to abortion. Howard Dean told a panel assembled by National Journal that he would be rooting for a shutdown if he was still chairman of the Democratic National Committee, so confident was he that Republicans would be doomed by their own overreach in a replay of the 1995 confrontation with Bill Clinton.

Social conservatives will instead have to settle for a doomed stand-alone vote on Planned Parenthood funding in Harry Reid's Senate. There will be no government shutdown. John Boehner's House Republicans get to re-fight the battles of 1995-96 without the political misstep that cost them the momentum on spending sixteen years ago. Without the shutdown, it is possible the GOP would have never embraced earmarks, crony capitalism, and compassionate conservatism.

Yet for all its faults, the Gingrich Congress had real accomplishments even after the shutdown. Among them were welfare reform, a capital gains tax cut that helped ignite the biggest economic boom since Ronald Reagan was in office, and a balanced budget that their compassionate conservative heirs subsequently flitted away. The big question is whether this budget deal is the high watermark of the new Congress's fiscal conservatism, the absolute most that can ever be extracted from Obama and Reid, or something that sets the table for future reform.

Paul Ryan's budget presents the GOP with a golden opportunity to start a needed debate: Do we want to maintain our tax burden at its historic levels? Or do we want to maintain our current spending commitments, even as demographic changes make those commitments unaffordable at our present tax burden? It is a question both Presidents Bush and Obama chose to punt on, setting us on a path of unsustainable debt levels that will sink our economy. What will it be?

We now know that Boehner is no Gingrich. We have yet to discover whether that's entirely a good thing or not.