House Republican spending-cut talk has been all over the lot during the last year. Remember Paul Ryan’s 2010 “Road-Map” document, designed to shut up critics who said GOPers were unwilling to commit to any specifics? Republicans soon backed away from the Road-Map because it included major structural changes in Social Security and a “voucherization” of Medicare. GOP interest in “entitlement reform” was also undercut by the failure of the Bowles-Simpson commission to draw much support from either party for a entitlement-cuts-for-tax-increases deal.
A focus on discretionary spending as opposed to entitlements was also encouraged by the emergence of current-year appropriations as the flashpoint of the deficit debate. And even before that, Republicans incautiously threw out a $100 billion figure for immediate appropriations cuts in their campaign-stretch-run “Pledge to America.” John Boehner eventually backed off that number, arguing that it was measured from Obama appropriations requests rather than actual spending. And then, this week, the hyper-conservative and very influential House Republican Study Committee released a proposal for very, very large permanent cuts in non-defense discretionary spending that would accompish both the $100 billion first-year target and a supposed ten-year harvest of $2.5 trillion (with lots of magic asterisks thrown in for TBD across-the-board reductions); the numbers suggest a 40% reduction over what would be necessary to continue current services. Maybe this is just a mine canary to test the willingness of Republicans to support cuts far beyond anything ever seriously proposed in the past, but House Majority Leader Eric Cantor immediately made positive noises about the package.
With me so far? The next cookie on the plate was the announcement that Paul Ryan would provide the official GOP response to the State of the Union Address.
So where are Republicans headed on spending? One thing that’s clear is that none of their proposals include defense or homeland security spending. A second thing that’s clear is that it’s entirely possible to promote discretionary cuts in the short-term and entitlement cuts later on (indeed, the Road-Map backloads entitlement cuts by “grandfathering” current beneficiaries). And a third thing that’s clear is that Republican squeamishness on big domestic appropriations cuts is a product of the popularity of most of the programs they would cut, not some concern about the impact on the economy. Republicans appear to have fully and universally drunk the kool-aid of 1930s-era belief that cutting public employment or public benefits somehow can’t damage the economy via reduced consumer demand.
On this last point, the most telling recent quote was from RSC member Tom McClintock (R-CA):
Presidents like Hoover and Roosevelt and Bush … and now Obama, who have increased government spending relative to GDP all produced or prolonged or deepened periods of economic hardship and malaise.
So don’t expect Republicans to embrace the pump-priming Keynsian theories of that notorious socialist Herbert Hoover.
The Democratic response to this mania will obviously depend on which budgetary strategy the GOP decides to pursue. It’s clear some sort of bait-and-switch from Tea Party “cut it all” rhetoric will occur, but whether Republicans will lurch in the direction of shutting down whole major federal functions or going after Social Security and Medicare is very much in the air.