The Budget Hawks Are Winning

Six months ago, budget hawks were grounded. Like other budget hawks, our hawk cabal at Brookings, often in cooperation with other groups, had been writing books, traveling around the country yelling “FIRE,” meeting with members of Congress and two administrations, organizing public events, writing op-eds – in short, doing all the things those with little power do to get the attention of those in power. And we had been engaged since 2004 with modest impact.

Now, as Senator Moynihan used to say, “of a sudden,” the sky is full of budget hawks. The American public awakened to the problem and ultimately became engaged in the electoral process, in part because of the Tea Party. Over the summer and fall of last year, a platoon of deficit reports also appeared, all of which carefully analyzed the deficit and proposed reasonable solutions. The most important of these was from President Obama’s own commission, co-chaired by a Republican and a Democrat, that recommended cuts in the military, in Medicare and Medicaid, and in other programs, as well as reforms of the tax code that would produce additional revenue while making the code fairer and less complex. And if the continuing refusal of most Republicans to increase taxes was one of the major barriers to a possible budget deal, conservative Republican members of the Commission, Senators Coburn, Crapo, and Gregg broke ranks and signed on to the tax increases in the Commission proposal. Modeling the behavior that members of Congress and the Administration must follow if the deficit is to be conquered, Coburn said, when asked about agreeing to tax increases: “We have to start somewhere, and it can’t be all my way.”

And the Hawks continued to fly. Sounds about the killer deficit emanating from the White House and Capitol Hill began to carry the deficit hawks to new heights. It seemed possible that soon major political figures would begin issuing detailed deficit cutting proposals.

This promise was fulfilled when Paul Ryan, a rising star in the deficit world and head of the House Budget Committee, with the backing of the entire House Republican leadership and seemingly almost every Republican in the House, revealed a sweeping plan to greatly reduce the deficit by cutting spending. More remarkable still, venturing where no deficit hawks of either party had gone before, Ryan proposed radical changes in the structure of both the Medicare and Medicaid programs. In classic Republican form, the Ryan proposal all but ignored cuts in military spending and balked completely on tax increases. But the proposal, widely hailed as serious but flawed, should be seen as an opening offer, and more importantly, it put immense pressure on the president to do something. Until the Ryan proposal, and the rising interest on the part of the public, President Obama had not made a broad, serious proposal to deal with the deficit — not even endorsing his own deficit commission’s plan when it was released last year.

Yesterday the president did respond and revealed his priorities as he proposed tax increases, reductions in both Medicare and Medicaid, cuts in the military, and a host of other cuts.

This is progress. Indeed, from the perspective of just nine months ago, it is almost impossible to believe that so much has happened so quickly, especially in view of the years when absolutely nothing was accomplished and the deficit continued to grow to previously unimagined levels, threatening the solvency of the federal government and a financial disaster of historic proportion.

Yes, I know there’s still a long way to go. But the big players are in the game and the president is calling for bipartisan talks. In the next several days the Gang of Six in the Senate will issue the first bipartisan plan, giving still more momentum to the drive for a deal. As the president’s commission put it, the moment of truth has arrived. Despite the carping on both sides that accompanied the President’s speech yesterday, a deal is now possible. We’re all hawks now.