YOUNG: A winning budget gambit

How the GOP forced Obama into the game

Democrats must hope Republicans don’t follow their sequestration victory with one even bigger. To do so, Republicans would need to look no further than President Obama’s budget vulnerability. With this year’s budget coming more than two months late, and none of his ever having come close to balancing, Mr. Obama’s weakness offers Republicans a chance to replicate their recent success — and on an even higher level.

The president picked the sequestration fight, waged it across the country and over the airwaves for months — and lost. With recently passed legislation funding the government until Oct. 1, Washington is in the longest fiscal ceasefire it has seen in some time. It won’t last.

It will end sometime around August just the way the latest battle started: with a need to increase the debt limit. Republicans will again find themselves in the same corner they were in at the beginning of 2013: desirous of pursuing spending cuts but facing a debt limit that does not lend itself well to that pursuit.

Both parties are wisely wary of another debt limit fight. Back in August 2011, both sides lost when they went right to the brink of government default. Neither wants to do so again.

Republicans adroitly sidestepped it most recently by suspending the debt limit for a short time — but long enough for April’s tax receipts to come rolling in and effectively push it back to August. However, they did not simply avoid it, they simultaneously moved spending — the fight they wanted to have, in the form of sequestration — to the front of the line and put Senate Democrats into a box.

Republicans cornered Senate Democrats by making the price for the debt limit’s temporary suspension a requirement that both bodies would have to pass a budget resolution by April 15 — or have their pay deferred. To cynics, this was show without substance, but to constituents, it resonated: no budget, no pay. It worked.

It was more onerous than it first appeared. Senate Democrats had not passed a budget resolution in nearly four years. When they finally passed one last month, it contained almost $1 trillion in higher taxes and passed by a scant 50-49 margin, with four Democrats opposing it.

Again facing a debt limit increase as the next fiscal fight in the line, can Republicans recreate their recent magic? They can, and on an even greater scale.

The obvious solution is to this time make the price of debt limit suspension the requirement that Mr. Obama produce a budget on time and that balances within 10 years.

If that sounds easy, just consider the following. Washington’s budget rules stipulate that the president produce a budget by the first Monday in February. Now April, this year’s won’t arrive until April 10 — even though both houses of Congress have passed theirs.

Second, Mr. Obama has not only never produced a budget that balances under his own assumptions at any point in its 10-year projections, his budgets have never come closer to balance than a projected $533 billion deficit. Ironically, that was in his first budget, and it was projected to occur this year, which the administration’s budget released last year then revised to an estimated $901 billion.

Certainly, it would be no mystery in Washington how Mr. Obama would produce a balanced budget. He would do it the same way Senate Democrats were forced to do it: with large tax increases. However, most Americans do not know this and seeing such huge increases would be illuminating, to say the least.

Such a move would thrust Mr. Obama onto the defensive on his weakest policy position — and do so at a time when his support appears to be eroding. According to a recent CBS News poll, the president’s approval rating had dropped to just 45 percent versus 46 percent disapproval. His rating on handling the budget deficit was far worse — 33 percent approval to 57 percent disapproval.

Finally, such a direct requirement of Mr. Obama is a far greater coup than requiring Senate Democrats to produce a budget resolution. Outside of Washington, few probably knew the Senate hadn’t produced a budget resolution for years, and frankly, few probably know they now finally have. This would not be the case with an Obama balanced budget submission.

Republicans find themselves right where they were just a few months ago, but in far better political shape. They have just won a fiscal fight and Mr. Obama has fallen from his Inauguration high. However, they should not lose sight of the current circumstances’ limitations.

The debt limit is dangerous for both sides. Republicans lost when they tried to insert spending cuts into 2012’s year-end tax hike debate, and Democrats lost when they tried to inject tax hikes into the fight over sequestration.

Republicans, therefore, need to leapfrog the debt limit issue, just like they did a few months ago, in order to get back to a spending-cut debate. Requiring Mr. Obama to produce a balanced budget on time, in exchange for another debt limit fix, would fit the bill. It would get them into the debate over an Obama budget and the government’s annual funding, which will need to be addressed by Oct. 1.

If Republicans’ previous effort to force a budget on Senate Democrats worked, this effort would elevate that effort to a far higher degree by focusing on Mr. Obama. Democrats had better be worried that Republicans don’t manage a repeat of the upcoming debt-limit hike in August — the sequel might prove even more compelling than the original.

J.T. Young served in the Treasury Department and the Office of Management and Budget from 2001 to 2004 and as a congressional staff member from 1987 to 2000.

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