Judd Gregg: A budget that fails to learn history’s lessons

After the 1980 election, Ronald Reagan arrived in Washington riding the slogan that government was the problem, not the solution.

He became one of the most impactful presidents of the twentieth century. 

Along the way, he and the Republicans that followed him to Washington learned a few things — and, of course, made a few mistakes.

{mosads}President Reagan hired as his budget director a young, aggressive, conservative House member named David Stockman.

In order to fulfill the purposes of the Reagan campaign and movement, the first Reagan/Stockman budget sent up to Capitol Hill took an ax to numerous federal programs that were annually funded — known as discretionary programs — while dramatically increasing the commitment to defense.

There were no proposals included in this Stockman budget to address the most significant spending items in the federal universe, specifically entitlement programs.

By leaving these items out of the arena, Stockman essentially guaranteed that, even if he were successful in cutting the individual programs favored by the Democratic Congress for years, the underlining drivers of the growth of the national debt would hardly be affected.

The practical effect of this budget was to mire the Reagan revolution — intent on fundamentally changing Washington — in a hand-to-hand street fight over the funding of hundreds of small federal programs.

Massive amounts of energy and political capital were expended. Supportive members of Congress — the Reagan Robots, as they were known — cast vote after vote that did not in the end reduce the size and growth of the federal government in any significant manner.

When the smoke of these battles cleared, the political capital of the new president and his supporters in Congress had been much diminished. 

The chance to effect real, lasting change in the cost and effectiveness of the federal government was missed.

This should sound familiar, because this path is being trod again.

The budget proposed this year by another young, aggressive, conservative former House member — Office of Management and Budget Director Mick Mulvaney — tracks almost identically with the original Reagan proposal, right down to the many discretionary programs that are to see large funding reductions and the increase in defense spending.

There are differences, of course. Today, discretionary spending makes up a significantly smaller portion of the federal budget pie. 

It is down from approximately 40 percent in 1980 to less then 30 percent today. Entitlement spending, which is the core driver of the looming federal fiscal distress, is up to over 60 percent, and growing fast.

In 1980, Democrats loyal to Speaker Tip O’Neill (D-Mass.) controlled the Congress, and stymied the likelihood of success at the starting gate. This is not the case today, as the Republicans control the House. 

But waiting on the horizon now are the Senate Democrats and the filibuster rule that requires 60 votes to pass appropriation bills.

Since most of the programs proposed for dramatic cuts are favorites of the left, there will be no cooperation when it comes to instituting the Mulvaney budget from the Senate Minority Leader Charles Schumer (D-N.Y.).

The Mulvaney budget does make the very appropriate political point that many discretionary programs are bloated, wasteful and directed at sustaining political groups.

No conservative can deny the need to defund organizations such as National Public Radio, which takes everyone’s tax dollars and spends them on advocacy for a far-left agenda.

Unfortunately, if pursued aggressively and unilaterally, this across the board attack on non-defense discretionary programs will lead up a blind alley for Republicans, especially in the House.

Real change in the direction of the federal spending trajectory — which is straight up — will only come through reforming the driver of this growth: Entitlements.

If this administration does not take lessons from history, a great deal of time, energy and political goodwill will be frittered away in battles that may occasionally be won but will come at a steep cost. Victory in the larger war of actually putting the federal financial house in order will be rendered impossible.

President Trump has said he will not address Medicare or Social Security reform. He has therefore taken off the table two of the key causes of our major debt and deficit problems. 

But this does not mean that he should use his considerable political clout on pushing the Mulvaney budget and in the process reduce the chances for other major reforms.

The two most defining and fundamental legislative changes proposed by the president were the healthcare reform reset and tax reform. 

With the defeat of the healthcare bill last week, that issue appears to be in legislative limbo, at least for the time being.  

The administration should therefore have a single focus, legislatively speaking: Tax reform.

If the president and the Republican Congress can accomplish effective tax reform, they will have done a great service to the nation, safeguarding our future solvency and boosting opportunities for economic growth.

With the Mulvaney budget, the point has been made: much of the non-defense discretionary spending in Washington should be reduced or at least dramatically adjusted. 

However, this budget is not going to pass. It will be stopped in the Senate. 

The effort to change this reality should not be allowed to undermine or distract from the big picture of fixing our tax laws. 

Republican members, especially those from competitive House districts, should not be asked to use up their political capital on votes that have no likelihood of surviving in the Senate.

History does not need to be repeated just to make a point. 

A better course would be to take advantage of the knowledge gained from that history and use it to produce real and lasting results that will meet the goals of the president, and those who put their hope and faith in him.

Judd Gregg (R) is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee, and as ranking member of the Senate Appropriations Foreign Operations subcommittee.

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