Boehner Faces GOP Budget Revolt

Today’s news that conservatives in the House Republican Study Committee will draft their own alternative Fiscal Year 2012 budget to challenge the GOP leadership highlights Speaker Boehner’s problems in keeping his caucus unified. But he’s not the only one. In the budget fight, neither President Obama, nor Speaker Boehner, nor Leader Reid can lead, because by and large their troops won’t follow.

So far in the spending fight, delay may have actually helped congressional leaders.  All the strum und drang has been about very tiny spending numbers and the CR.  The FY12 budget (and its five- and ten-year projections) will involve very big numbers and very basic fiscal policy.  And the debt ceiling will involve both.

Instead of trying to make a deal on FY 11, then another on the FY12 budget, and a third on the debt ceiling, the best strategy would be to make a “grand bargain” on all three at the same time.  If Ryan delays a couple of weeks, and Congress forges another CR until mid-April or so, then the debt ceiling may be nearly breached and a “global” discussion of all three could take place.

All of this complicated scenario-devising can’t hide the underlying problem.  Just ask yourself these three questions:

• How can Chairman Ryan get the necessary votes either in committee or on the House floor when he will be asking his colleagues to vote for at least 2 years of trillion dollar deficits?
• Who in either party will vote to radically change federal pensions, Medicare, Medicaid, and other entitlements with an aging voting population and no short term deficit reduction in the offing?
• Why would the President begin public negotiations when it is clear that neither Boehner nor Reid have their own troops in line?

In short, none of the three principals can make a deal that they may be able to deliver on.

The revolution in the GOP ranks is dramatized by the announcement today that the Republican Study Committee within the House caucus will develop its own budget, countering what they perceive will be an insufficiently aggressive budget by Boehner and Ryan.  Since almost two-thirds of House Republicans belong to the RSC, their challenge cannot be ignored.

At the same time, House Democratic Minority Whip, Steny Hoyer, has repeated that once again it may be the House Democrats who come to Boehner’s aid and provide enough votes to pass the CR for FY11.  Recall that at the last vote, it was Democrats who voted in enough numbers to pass the CR, as 54 Republicans voted against it.  Whether Hoyer’s remarks help or hurt Boehner remains unclear.

One of the most famous verses in the Bible is 1 Corinthians 14:8.  It reads, “For if the trumpet give an uncertain sound, who shall prepare himself to the battle?”

The President has sounded the trumpet—we have unsustainable deficits and debt and we must take action.  Boehner and Reid agree resoundingly.  Every serious policymaker and economist concurs—America’s fiscal path will lead to fundamental damage to America’s economy and international standing in the future.

And yet, in his own way, each sounds an uncertain trumpet to the troops.  The president wants Congress to go first; Reid wants the House to act first; Boehner doesn’t know if he has the votes to go first.  The American people look on, confused and bemused, in a state of “buyer’s remorse” over the election of November 2010.

In such a melee, with no one blowing the trumpet and leading the charge, the troops haven’t even formed up yet.

The dust will clear one way or the other.  Congress will act in a convincing fashion to get projected deficits trending down or the bond traders in international markets will strike.  So we end with a final question:

“What happens when a 30-year-old bond trader in London all of a sudden wants 5.5 per cent on the American 10-year note, instead of the current 3.4 per cent?”

Stay tuned.

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