Opinion | The GOP’s Strange Budget Strategy


After a hiatus during the Trump years, Republicans are back in the mood for fiscal probity.

It’s very strange not to seriously pursue a deeply held goal when you have unified control of Washington, then to insist on trying to achieve much of it in one fell swoop when you barely have control of one chamber of Congress.

But here we are. This is the Republican pattern. It has been, fundamentally, driven by the fact that two Republican presidents in row now have won the White House by effectively running against the fiscal conservatism of the congressional wing of the party.

George W. Bush’s compassionate conservatism was an implicit rebuke of Newt Gingrich’s bomb-throwing majorities that tried to balance the budget at all costs. Donald Trump’s Make America Great Again populism was a rejection of Paul Ryan’s debt-obsessed majority that hoped to move the goal posts on entitlement reform.

The problem is that Ryan was right about the substance and Trump is right about the politics, and that dilemma — in a nutshell — is why the country’s debt-to-GDP ratio is nearly 100 percent and is projected to keep climbing.

Like the ne’er-do-well occasionally convinced to scrub up and show up at church on a Sunday, the GOP experiences spasms of fiscal rectitude, followed by longer bouts of going along with the usual Washington practice of devil-may-care fiscal blowouts.

The party is waging a generational effort … once every 10 years or so. It is showing great staying power … in between the times it barely talks about the issue at all.

It had looked like GOP fiscal hawks had either all molted into big-government populists, or at least were happy to associate themselves with that flock. So it’s been some comfort to anyone concerned about spending that the House Republican backbench has sounded almost indistinguishable from the GOP conference back in the tea party heyday of 2011.

Of course, Republican budget hawks would have more credibility if their passion and commitment didn’t seem contingent on — with some honorable exceptions — a Democrat being in the White House. They obviously could have more influence, if they were gutsy enough to exercise it, over a President Trump or DeSantis than they can ever hope to have over a President Biden.

That said, Republicans never want to spend as much as Democrats do (although they want to cut taxes more), and the dynamic in Washington in recent years meant that if the GOP wanted to relieve depleted defense accounts, they had to give Democrats the non-defense spending that they wanted.

Now, the barely comprehensible levels of pandemic-era spending over the last three years, when Washington has run more than $7 trillion of budget deficits, should be enough to give anyone pause.

As the economist Herb Stein famously said, if something can’t go on forever, it will stop. No one can know how long we can go on with the debt on the current trajectory without baleful consequences — it could be 20 years, it could be 20 months. Prudence suggests that we should avoid finding out.

And that inevitably means squeezing the entitlements that Trump — the party’s past president and perhaps future nominee — says shouldn’t be cut by a penny.

If the federal budget consisted only of discretionary spending, it’d be in decent enough shape.

With some upward jags — the war on terror, the financial crisis — both domestic and defense discretionary spending are down as a percent of GDP from their levels in the 1980s.

As budget maven Brian Riedl of the Manhattan Institute points out, mandatory spending is where the action is.

In 1965, mandatory spending was 34 percent of total federal spending; in 2022, it was 71 percent. Social Security and Medicare alone are now 34 percent of the budget.

In 2032, Social Security, health entitlements and interest costs are projected to account for 86 percent of the increase in spending over 2008 levels, according to Riedl. The growing Social Security and Medicare shortfalls will account for almost all of the growing deficit over the next 10 years. (The 2017 GOP tax cuts contribute to the projected deficits going forward, but only marginally.)

The scale of the challenge means that Republicans are unlikely to produce any plan to balance the budget in 10 years, certainly not one without huge magic asterisks.

Making some progress against spending this year during the debt ceiling fight would be welcome. But — with a hostile press, a divided party (many Senate Republicans aren’t on board with brinkmanship) and markets that will flip out if the limit isn’t extended on time — the GOP’s expectations for the showdown should be realistic.

Still, the debt limit is a natural point of leverage. Republicans are fooling themselves if they think it’s going to unlock a new era of austerity, but the White House is delusional if it thinks it can refuse to negotiate at all.

Republicans should seek limits on discretionary spending (although it’s tricky because now is not the time to cut back on defense spending during a time of geopolitical challenge from Russia and China); push some technical, not particularly important savings on entitlements; and embrace the TRUST Act that would create bipartisan committees to at least get the conversation going on how to keep Social Security and Medicare from going insolvent and/or overwhelming the budget.

If this seems small beer compared to the Budget Control Act adopted during the debt showdown in 2011, it should be remembered that the law’s caps quickly eroded and then disappeared entirely.

More important than what happens over the next few months is whether the party can nominate and elect a president in 2024 who, unlike Bush or Trump, is in sympathy with the fiscal conservatism of House conservatives.

Even that won’t be a magic bullet, since the public will still need persuading that medium-term changes to Social Security and Medicare don’t represent a clear and present threat to its well-being.

Otherwise, even what a decade or so ago would have seemed an embarrassingly modest goal — keeping the debt at roughly 90 percent of GDP — will be out of reach.

Ronald Reagan quipped that the deficit was big enough to take care of itself. Now, it’s big enough that no single high-stakes battle or act of Congress is going to tame it. Fiscal hawks have to be in for the long haul.

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