Articles

Obama's Government Shutdown Gambit

April 07, 2011

In the White House Press Room on Tuesday, President Barack Obama did what comes naturally—scold others, in this case the Congress. Mr. Obama complained that a budget agreement "could have gotten done three months ago."

What he didn't say was that the budget should have "gotten done" six months ago, before the current fiscal year started last Oct. 1. Our government's failure to have a budget in place halfway through the fiscal year is the president's responsibility. He and his party dominated Congress by wide margins when the budget was supposed to be put in place.

Also on Tuesday, at the other end of Pennsylvania Avenue, House Budget Chairman Paul Ryan did what the president has not. Demonstrating leadership and more than a little courage, Mr. Ryan laid out a thoughtful, ambitious blueprint for the next decade.

The Path to Prosperity would return discretionary spending to its 2008 levels and hold it flat for five years; reduce the federal government's work force by 10%; slash corporate welfare; reform the tax code; and reduce the corporate and top personal rate to 25%. It would repeal ObamaCare, change Medicare so the government helps all seniors pay for an insurance policy they choose, and send states money for each person covered by Medicaid, plus the flexibility to spend that money as they see fit.

The Obama-Ryan budget battle foreshadows what Americans are likely to hear in the 2012 campaign: an unengaged, reactive chief executive versus a bold, reform-minded GOP.

In the short term, it's obvious what Mr. Obama hopes to gain. Having watched his standing as "a strong and decisive leader" drop to 52% in last month's Gallup poll from 60% last year, the president is looking to profit politically from a shutdown of the federal government.

When the government was twice shut down in 1995 and 1996, Congressional Republicans survived the controversy and kept their majorities in the 1996 election. At the same time, the shutdowns boosted Bill Clinton's image. Only 37% viewed him as "a strong leader" in a June 1995 ABC News poll. In a January 1996 CBS News poll after the shutdowns, 53% said Mr. Clinton had "strong qualities of leadership."

The president will instruct his party to demagogue the House Republican budget, labeling it as an assault on the poor and a windfall for the rich that will rip America's social safety net to shreds.

Never mind that these charges are false and irresponsible. Mr. Ryan would have the government spend $40 trillion over the next 10 years, $6.2 trillion less than Mr. Obama's budget plan of $46 trillion. This is an overall reduction in what the government plans to spend, not a cut from what it is spending today.

Under Mr. Ryan's proposal, for example, health-care spending would still rise for both Medicaid, which serves the poor, and Medicare, which serves seniors. The $275 billion spent on Medicaid this year would grow to $305 billion in 2021 while the $563 billion spent on Medicare this year would grow to $953 billion in 2021. Nor would anyone 55 years or older be affected by any Medicare reforms.

Mr. Ryan and his colleagues want to act now to keep entitlement programs solvent. They want to keep Americans from experiencing the pain of the ­crisis that will come when the public debt has doubled by 2012 (from the level when Mr. Obama came into office) and nearly ­tripled by 2021, as it would under the president's plan. Already mandatory spending, the part of the budget that's automatic and not subject to approval each year by Congress, eats up all available revenue this year. Medicare goes broke in 2029, and Social Security is bankrupt in 2037.

The White House doesn't care—it perceives a political path to victory in 2012. What makes this strategy doubly reckless and cynical is that the administration knows a debt crisis is coming and that its spending plans cannot continue.

But the Obama administration's adults—Chief of Staff Bill Daley, Office of Management and Budget Director Jack Lew, and National Economic Council Director Gene Sperling—are clearly not in charge. The politicos—Senior Adviser David Plouffe (who managed Mr. Obama's 2008 campaign) and Communications Director Daniel Pfeiffer (who had the same title in the 2008 campaign) have their hands on the wheel. The White House is in full re-election mode.

The House GOP budget will not become law this year, but it will smoke the president out on spending and provide a framework for Republicans to discuss the nation's fiscal challenges. The contrast between the GOP's boldness and the president's cowardice is striking. The question is whether the president and his party will pay a political price for their abdication of leadership. We're about to find out.

This article originally appeared on WSJ.com on Wednesday, April 6, 2011.

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