A (Bill) Clinton Path To a Republican Budget

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Republicans in Congress have a budget problem. Like the dog that caught a car, now that the Republicans have control of both houses of Congress, they actually have to legislate. Passing a budget is complicated enough for Republicans given the party split between those who want more funding for defense and those who want to make significant progress on deficit reduction; however, the situation is even more complicated because Senate Democrats have the power to filibuster (unless the budget is done through reconciliation) and because President Obama can veto any budget containing cuts to his pet priorities. Luckily for Republicans, a Clinton is ready to show them a path to nearly everything a dream Republican budget might have.

President Obama's budget proposal for fiscal year 2016 (running from October 2015 to September 2016) is for $4 trillion in spending, breaking the sequester spending rules on both military and domestic discretionary spending. His hope is that the carrot of more defense spending will get Republicans to go along with his wish for more government spending on almost everything else.

Republicans should resist this deal and use Democratic allies to win the fight; specifically, Congressional Republicans need to appeal to the Clintons.

President Bill Clinton's last budget was for fiscal year 2001, which began just before the 2000 election. That budget spent $1.86 trillion, less than half of what President Obama is proposing. If this final Clinton budget is adjusted upwards for subsequent inflation (32 percent) and population growth (12 percent), we arrive at a figure of $2.76 trillion, still only 69 percent as much as President Obama wants to spend. This difference is what Republicans should exploit.

Imagine the Republican budget proposal that begins as follows: we propose to appropriate spending for each agency equal to a minimum of the population and inflation adjusted amount in President Bill Clinton's final budget plus 50 percent of the additional growth between President Obama's proposal and the adjusted Clinton budget. That is, Republicans would not even try to roll federal spending back to when we last had a balanced budget, but only move to reverse half of the enormous spending increases that have occurred under Presidents George W. Bush and Barack Obama.

Such a budget would spend $3.25 trillion and would come with an estimated budget surplus of $220 billion based on the latest Congressional Budget Office projections of 2016 federal revenue.

Such a budget would do wonderful things for the country and the economy, but it would not satisfy some Republicans who desire more defense spending (in fact, it would cut about $120 billion from defense), and it would not survive President Obama's veto pen because there would not be sufficient funding for Obamacare. Luckily, we have some room to maneuver and solve those problems.

Starting with the budget proposal of rolling back 50 percent of spending growth beyond the inflation and population adjusted final Clinton budget, now imagine if Republicans added just four more changes. Spending for the Departments of Agriculture, Health and Human Services, and Homeland Security would be set right where President Obama asked. This would preserve funding for food stamps (SNAP) and Obamacare subsidies (since repeal is not yet possible), greatly reducing any Democratic criticism about a budget that attacks the poor or working class. It also protects Homeland Security funding since Republicans have already proven incapable of handling any changes to that budget. Finally, the fourth change would be to increase defense spending to a nice, round $600 billion, $14 billion above President Obama's request (which already contained defense spending increases).

This budget would spend $3.77 trillion, $230 billion less than President Obama's proposal, and would carry an estimated budget deficit of $300 billion. That is not a balanced budget, but it is the smallest deficit since 2007's $160 billion shortfall. It is also $144 billion under the sequester spending level, so Republicans would be doing even more than current law to reduce spending.

Republicans get the increased defense spending that many of them want. They also get about $230 billion in deficit reduction. They don't get cuts in Obamacare, but they don't have the votes to get that done under any scenario. They can still make programmatic changes within agency budgets in the appropriations bills to point government more toward conservative priorities. Most importantly, because of the basis for this proposal, Republicans get a great strategy for passing this budget.

At a time when Hillary Clinton certainly appears set to run for president, Republicans can stake their claim to reduced spending in many areas by pointing out that they are being 50 percent more generous in inflation and population adjusted spending than President Clinton was. Will Democrats in Congress, or even President Obama, want to claim that President Clinton was insufficiently generous with the poor and working classes? Will they really want to take a stand in opposition to the Clintons at this point in time? I doubt it.

Certainly Hillary Clinton is unlikely to want to criticize a Clinton budget. That will make other Democrats hesitate and likely bite their tongues. Using the Clintons against the rest of the Democrats offers the Republicans in Congress a clear path to almost all their budgetary wishes. Now we just have to see if the Republicans are smart enough to take the chance sitting right in front of them. After all, as President Obama said, "elections have consequences."

Jeffrey Dorfman is a professor of economics at the University of Georgia, and the author of the e-book, Ending the Era of the Free Lunch

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