Republicans face major governing test: passing a budget

When Republicans took control of both houses of Congress, a major benchmark they set for themselves was a return to a normal budgeting process. The House and Senate unveiled their budgets this week, with key points dividing the GOP.

When Republicans took control of both houses of Congress this year, their leaders promised to show that they could govern. One of the benchmarks they set for themselves was to return to a more steady process of budgeting and funding the government, which is a basic function of Congress.

As Don Stewart, a senior aide to Senate majority leader Mitch McConnell (R) of Kentucky, put it in an interview last fall: Voters “aren’t looking for us to change the world, but they are looking for us to pass a funding bill every now and then, to pass a budget, to show up for work.”

That test began this week as House and Senate Republicans unveiled their budgets on Tuesday and Wednesday. The two versions share a common conservative vision, starting with a balanced budget within 10 years that reduces spending by $5.1 trillion (the Senate plan) and $5.5 trillion (the House plan).

“You’re not governing until you attach numbers to your ideas. Republicans have at least taken that step,” says John Pitney, a congressional expert at Claremont McKenna College in California.

But the plans also differ in significant ways, exposing divisions within the GOP. Will that make Republicans look more like a circular firing squad than a circle dance? It was only a few weeks ago that they were involved in a knock-down, drag-out fight over immigration policy and the funding of the Department of Homeland Security. A DHS shutdown was only narrowly averted. 

True, Republicans this time don’t have to worry about Democrats’ vigorous objections – yet. A budget resolution is a statement of priorities, a road map, without the force of law. It can pass both houses with a simple majority vote. The president can’t veto it.

“This is a Republican vs. Republican situation. If the Republicans can’t get a budget resolution passed, and it’s not going to be as easy as some people think, then the Republican claim to govern goes right down the tubes,” says Stan Collender, a budget expert and executive vice president at Qorvis MSL Group in Washington.

Key points divide Republicans, perhaps the most contentious being what happens to military spending.

Like the president’s budget, the House and Senate plans seek to increase total defense spending. The differences are over amounts and how the increase occurs, given that on Oct. 1, across-the-board spending caps kick in under the Budget Control Act of 2011. 

The House plan skirts the cap by significantly beefing up the Overseas Contingency Operations fund, which covers war needs not subject to the cap. The Senate plan beefs up the OCO fund, but by a lesser amount, and also calls for a “reserve” fund, with the possibility that budget caps can be renegotiated.

Fiscal hawks and defense hawks are at odds over the “gimmicks” and increases.

Another big difference between the two plans: the specifics of Medicare reform. The House plan calls for turning Medicare into a voucher system, though the elderly could still choose traditional Medicare if they wanted. The Senate doesn’t give such radical directives and simply asks the relevant committee to find $400 billion in savings over 10 years – the same amount that the president asks for. 

Some House hardliners also complain of smoke and mirrors being involved in reaching a balanced budget within a decade – saying that it relies more on a creative accounting practice known as “dynamic scoring” than economic reality.

“I don’t know anyone who believes we’re going to balance the budget in 10 years,” Rep. Ken Buck, (R) of Colorado, told The New York Times. “It’s all hooey.” 

Despite these differences, Republicans have several incentives to agree on a budget.

For one thing, budget unity helps project a message for 2016. Both budgets – the House with more specificity and the Senate with more flexibility – send the message that this is the party that is serious about tackling the debt. That won’t raise your taxes. That will repeal Obamacare. That wants to get started on reforming costly entitlement programs such as Medicare and Medicaid, and empower states and individuals to do more of what Washington does. 

Perhaps a more powerful incentive to agree is a process known as “budget reconciliation.” That would allow Republicans to pass changes in laws with just a majority vote – a real bonus in the Senate, where it often takes a supermajority of 60 votes to pass legislation.

Through reconciliation, the GOP could approve the repeal of Obamacare or roll back parts of the “Dodd-Frank” Wall Street reforms – then send those changes on to the president to sign or veto. But if House and Senate Republicans can’t agree on a budget, then the reconciliation opportunity will be lost. (Of course, the president would want to veto such changes, but Republicans hope that some of their new policies might put him in a bind if they were attached to bills he really cared about).

Meanwhile, let’s say Republicans agree on a budget and follow the “normal” process in which appropriations committees hammer out the actual funding for the various government agencies. Spending bills can pass the House with a majority vote, but Democrats can block them in the Senate. 

That’s why Democrats’ complaints can’t be ignored forever. These range from accusations of budget gimmicks to decrying tax cuts for the wealthy that come at the same time as cuts in food stamps and freezes in Pell Grants for college. Democrats also object to the plan for Medicaid to be kicked back to the states to manage, as well as the plan to replace Medicare with a voucher system.

House Speaker John Boehner, (R) of Ohio, seems to have realized that in a smaller budget instance. He’s working with Democratic leader Nancy Pelosi of California on a way to permanently fix the way Medicare pays doctors. That’s a change from the past, in which he has gone to Democrats as a last resort, after being abandoned by GOP hardliners. 

When the end of the fiscal year nears and crunch time comes in the fall, funding the government will have to have some Democratic buy-in to avoid a  shutdown or partial shutdown. Getting there can be messy or smooth. That’s part of the governing test.