Just Got Off The Phone With Steve Scalise…

…with whom we had a short discussion about the debt limit bill passed in the House yesterday.

Scalise is in a good position to talk about the issue, since as Chairman of the Republican Study Committee he was in a position to help craft the strategy under which the House GOP leadership is operating.

Here are a few basic points he had to make about what’s going to happen in the next few months on the budget.

First, the conservatives in the House believe they’ve made some headway against Speaker John Boehner’s former practice of negotiating with President Obama and Senate majority leader Harry Reid and then presenting his membership with the lousy results of poor negotiation. Scalise noted that the effect of what he called bad strategy was that it was always the House which was presented by the media as the problem and conservatives who were forced to make bad votes, while Reid consistently got to skate on trying to get his members to make tough votes.

Boehner has committed not just to the major stakeholders in his party but the conference as a whole that he’s not going to do business that way anymore. That he’s going to use the ordinary legislative process. in other words, the House will pass what it passes and then wait for the Senate to do its job. Why this somehow wasn’t always the case is a great question and one we didn’t really get into; Scalise doesn’t have much interest in trying to explain it and the suspicion is that Boehner wouldn’t be able to defend it either. Some things are too stupid to explain.

Second, Boehner seems to have recognized something about leverage. Unlike in the fiscal cliff fight, this time the Republicans have it; Obama and Reid don’t. On March 1, the sequester kicks in. And when it does, discretionary federal spending will drop from $1.047 trillion on an annual basis to $974 billion. That’s a real, actual, honest-to-God spending cut. It’s not a reduction in the rate of growth, which is what a “cut” in the federal budget is usually described as. It’s an actual budget cut.

Of course, when you’re running a trillion-dollar deficit a cut of $73 billion in discretionary spending (the total figure is pegged at $85 billion) is small potatoes. But in the Bizarro World that is Washington, this is a big, big deal. And the Democrats are in a panic about it – which is why last night there was this crazy business from Sen. Chuck Schumer about how he was going to get Republicans to agree to raise taxes by $500-600 billion so as to offset the sequester.

Boehner has committed to the House conservatives that he’s leaving the sequester alone. That the sequester is going to happen. There is pain in that – part of the sequester includes some pretty ugly cuts to defense, and there are Republican members in whose districts can be found defense contractors who will suffer significantly from those cuts. Postponing the sequester until March 1 was a product of those Republican members panicking and lobbying Boehner not to let it happen, but Scalise and the other fiscal hawks believe they’d prevailed this time.

And third, yesterday’s bill contained language which would limit the administration’s ability to engage in funny business on growing the debt. Rather than extending the debt limit by a dollar amount, which would have been more acrimonious, they’ve suspended it until May 19. The immediate reaction to that is that if the debt limit is suspended, a bad-faith Obama administration would just go to the Fed and borrow enough money not to have to worry about running up against the debt limit again. But Scalise says the bill prevents that. Without going into the details, he says this only enables the Treasury Department to use cash management techniques to keep the wheels turning.

The bill also forced the Senate to produce a budget or else they won’t get paid. Paul Ryan is putting together a House budget which is going to include Medicare reforms  and will balance in 10 years – Scalise says it can be done in five years and the RSC has put a plan together which does just that, and maybe some of the RSC’s ideas can make their way into Ryan’s plan to improve it – but the Senate isn’t going to do anything of the kind. What they’ll produce will be pure crap and it will never balance. It will contain all kinds of new taxes, it won’t cut spending…you know the drill.

But here’s the thing: it will at least be a budget. The Senate hasn’t had to produce a budget in four years because of the flawed strategy on the House side of allowing budget-by-continuing resolution. And while Ryan was pilloried for the heartless, throw-Grandma-off-the-cliff perception the Left had of his plan, the Democrats got off scot-free without even doing their jobs. Now they actually have to play this game, and when the public sees the crappy work product they put together and pass they’re going to look like clowns. And this is the wrong time for them to have to put out an unmistakably, facially irresponsible budget; when the public agrees by a 4-to-1 margin that Washington spending is out of control, you really don’t want to be the party which can’t produce a budget which ever balances and which doesn’t cut spending at all.

It’s not the most ambitious of programs, but Scalise thinks the reason it works is that Boehner has actually committed to it. And the bulk of the Republicans in the House, led mostly by the conservatives, have bought in as well.

The question is whether Boehner will follow through on his commitment and not go wobbly. If he can keep his nerve, the real pressure will shift to Reid – because he’s going to have to experience the difficulty Boehner has had to wade through in cobbling together a majority on the budget.

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