President Obama has pledged to help the Democrats win back control of the House in 2014, but it might just be the GOP promise to balance the budget in ten years that hands them a victory.
The financial math has sparked electoral concerns among some GOP lawmakers trying to preserve their House majority. Conservative members of the caucus consider it to be a moral imperative to put the government into the black by 2023, reaching a deal with House Speaker John Boehner and his deputies earlier this year to pass a budget that produces a surplus in ten years.
But to achieve that without tax increases or crimping national security, House Republicans would likely have to cut deeply into Medicare benefits, eviscerate discretionary spending, or rig their budget numbers in a way that undermines their credibility. Each choice could alienate voters—and refiguring Medicare has already sparked concerns a week ahead of House Budget Committee Chairman Paul Ryan of Wisconsin unveiling the Republican budget plan for fiscal 2014.
“Clearly the political prognosticators in this town will call it a calculated risk,” House Agriculture Committee Chairman Frank Lucas, R-Okla., told The Fiscal Times Wednesday. “Maybe the American public is ready for a little honesty. And by telling them what it takes to really achieve a balance in ten years, and doing it in a way that’s just straight forward, maybe they’re ready for a mature discussion about where to go.”
Democrats—fresh off their inability to stop the $85 billion sequester—think the other side of the aisle has put itself in an impossible spot with voters. “The main argument against this is that it’s very bad policy, but it is also bad politics for the Republicans,” Maryland Rep. Chris Van Hollen, the ranking Democrat on the House Budget Committee, said in an interview.
Ryan ascended to the number two spot on the 2012 Republican presidential ticket because of his scissor-friendly budget blueprints. Now, he is putting the finishing touches on a far more ambitious and politically risky plan that would wipe out the deficit in ten years instead of the three decades called for in his previous two budget documents.
The White House, many lawmakers, and governors are squirming over the $85 billion of additional across-the-board spending cuts mandated this year under sequestration, but that is a drop in the bucket compared to the magnitude of cuts required to reach a surplus a decade from now.
The government is currently slated to rack up a $978 billion deficit in 2023, according to the Congressional Budget Office. Because Republicans refuse any additional tax hikes, Ryan would have to slash projected spending by almost a trillion dollars to obtain the promised surplus.
The 10-year timeframe raises the question of how much of Medicare will be on the chopping block.
In the past two proposals crafted by Ryan, the country tried to reach a surplus in 30 years by turning Medicare into a voucher-style program for Americans under the age of 55. This reform would reverse the upward trajectory of government health care spending decades from now, but it would have kept the annual deficit at almost $300 billion in 2022.
For his latest blueprint, Ryan considered setting the age at 56 or higher to generate more savings. By Wednesday, Ryan retreated, in part over worries that support would erode among Americans approaching retirement who, according to Associated Press exit polling, overwhelmingly supported the Romney-Ryan ticket last year.
Many Republicans, including Ryan himself, assured voters during the last campaign that anyone 55 or older would be securely locked into the current, more generous Medicare system and didn’t have to worry about any changes.
Rep. Tom Cole, R-Okla., said yesterday that House Republican leaders were considering an alternative that would gradually raise the cutoff so that it would generate far less of an uproar. “I think what’s being considered now is leave it at 55, but write into law that going forward it would start at a certain date, which would be 55, but each year it would inch up a little bit,” he told The Fiscal Times.
Rep. Bill Cassidy, R-La., a physician, said it’s crucial to portray any cost-cutting efforts with Medicare as reforms.
“The political issue is, how well we can connect someone’s interest in having a strong [social] safety net with the need to reform and strengthen those programs,” he said. “Frankly, the president has demagogued bipartisan plans to reform Medicare, so we know it’s going to be a political issue. It’s easier for him to demagogue than it is for him to offer a plan that would strengthen and preserve Medicare.”
Democrats acknowledge that entitlement reform is needed, but they have called for closing tax loopholes to generate several hundred billion dollars worth of new revenue rather than rely solely on spending cuts.
“I can go home and say ‘entitlement reform’ which is absolutely essential, as long as we’re not first doing that before we protect the middle class,” Democratic Congressional Campaign Committee chairwoman Debbie Wasserman Schultz, D-Fla., told MSNBC Wednesday.
Obama has also backed more than $300 billion worth of Medicare savings by reducing payments to drug companies and has entertained the possibility of linking entitlement benefits to a less generous measurement of inflation . His more modest goal is to stabilize the national debt—currently $16.4 trillion– as a percentage of the overall economy instead of balancing the budget, which would require the kinds of choices putting the GOP into a bind.
In theory, Republicans can balance the budget in 10 years while sidestepping deeper Medicare cuts. The conservative Republican Study Committee announced a budget last year that it claimed would produce a surplus in 2017 by slashing discretionary spending.
Yet even this could rile up a public that has so far shrugged off Obama’s claims that the sequester cuts will eat into basic government services. The seemingly modest sequester, Obama has said, will cause air traffic control towers to close, longer airport security lines, fewer food safety inspections, mandatory employee furloughs, and thousands of children losing access to Head Start.
The Republican Study Proposal would heap another $150 billion off cuts on top of that, effectively tripling the impact.
Non-defense discretionary spending would go from roughly 3.2 percent of Gross Domestic Product today to barely more than 1 percent of GDP in the next ten years. The cuts would be $756 billion more over ten years than the reductions to non-defense discretionary spending that Ryan has previously supported.
Republicans are essentially betting that voters won’t penalize them for making hard choices.
“Everything up here is difficult now for all of us, but there are a whole lot more people now – a much greater percentage of the population –that realize how deep the hole is we’re in,” Said Rep. John Duncan, Jr., R-Tenn. “ I think that belt-tightening is more defensible now than it ever has been.”
