3 Charts That Explain Why the GOP Folded Like a Lawn Chair On the Budget

3 Charts That Explain Why the GOP Folded Like a Lawn Chair On the Budget

Late last week, the House passed the Bipartisan Budget Act of 2013 by a wide margin: 332-94. The bill is a compromise spending solution reached between House Budget Chairman Paul Ryan (R-Wisc.) and Senate Budget Chairwoman Patty Murray (D-Wash.) which increases spending levels for fiscal years 2014 and 2015. The Senate is expected to pass the bill on Tuesday, and President Barack Obama has already announced he'll sign it once it arrives at his desk.

The deal sets discretionary spending levels at $1.012 trillion for the current fiscal year – which will rise to $1.014 trillion in fiscal 2015 — and defuses sequester cuts slated to take effect in January. Absent the agreement, discretionary spending would decline to $967 billion early next year with a large proportion of the cuts hitting the Pentagon.

After the drama of the government shutdown back in October, you might wonder why Republicans would fold on a compromise solution that increases spending after Ryan's first three budget proposals had such ambitious reform proposals, from entitlements to the federal tax code. The short answer is the same reason that caused the shutdown in the first place: Obamacare.


What's in it for Republicans?

In the short term, Republicans get to tell defense contractors (long a traditional supporter of the GOP) that they "restored" cuts that were slated to take effect in 2014 due to the sequester. Over the long term, however, the House GOP leadership sure didn't make the Tea Party or libertarian wings of the party happy by compromising on two key principles of fiscally responsible reformists: spending and taxes. Indeed, not only does the bill increase spending by eliminating the only cuts that have ever gone through the Obama White House — the sequester triggers from the Budget Control Act of 2011 — it also increases revenues from "user fees" and "surcharges" rather than through taxes, which allows so-called fiscal hawks like Ryan who supported the bill to tell their constituents they didn't "officially" raise taxes.

That budget gimmick certainly didn't fool fiscally responsible voters or other grassroots conservative groups from Heritage Action to Americans For Prosperity (though according to liberal critics who claim those groups try to block defense spending cuts from ever occurring, you'd think they'd be happy about the deal). The compromise deal also did nothing to prevent 55 tax breaks from expiring at the end of the year that allow for individuals to deduct state sales taxes instead of income taxes, which is important to residents of states like Florida and Texas which lack income taxes.

So then why not hold out for a better deal? While House Republicans could have pushed another government shutdown if they wished, it most likely wouldn't have been any more successful in accomplishing any of the GOP's goals than the last one did. At the end of the day, the GOP still only controls the House, while the Democrats run the Senate and White House. How many more times will they all keep going in circles over the federal budget process?

The other long-term calculation the House GOP based their latest move on is the ever-growing unpopularity of the Obamacare implementation and its ripple effects in the health care market. Many critics of the government shutdown believed it served as more of a distraction to the general public from the negative effects of the Obamacare rollout than an aid in efforts to delay or repeal the health care law. Since the termination of the shutdown, the mainstream media has kept its attention squarely focused on the embarrassing failures of Obamacare, and the negative emotions polls reflected against the GOP immediately after the shutdown are slowly becoming ancient history. Of course, Republicans would like to keep it that way through the midterm elections of 2014, but that rather naively relies on the cooperation of a mainstream media that traditionally remains hostile to conservative interests — especially as we inch closer to election time. Still, the GOP decided not to risk any further unpopularity with a second possible shutdown by taking the possibility off the table.


What's in it for Democrats?

For starters, they avoid everything that the 2010 elections tried to accomplish by giving Republicans their largest House majority since 1947 — including substantial reforms to spending levels, or even having to touch entitlements (the 2012 elections also helped). In addition to restoring non-discretionary spending for their interests as well by undoing sequester cuts in the short term, the Democrats get to weaken the GOP's standing with the fiscally responsible base of the party and turn the focus of Washington's attention to the next major item on their agenda: immigration reform.

But, in the long term, the Democrats remain on defense going into the 2014 midterm elections and are in danger of losing their five-seat majority in the upper chamber of Congress. There are 10 incumbent Democrat Senate seats in red or purple states that Republicans have a fighting chance of winning in November — at least seven of which the GOP have a 50/50 shot of winning according to the polls. The failures of the Obamacare rollout aren't helping either — especially considering that they've only managed to sign up about 100,000 exchange enrollees in the face of over five million health plan cancellations due to the law.

And some far-left Democrats and their support groups even had the audacity to claim this bipartisan bill wasn't compromise enough, demanding even higher federal spending levels and more tax hikes.


What's next?

The bipartisan bill doesn't address the millions of long-term unemployed Americans whose unemployment benefits are scheduled to expire at the end of the year — an income bracket (under $30,000 a year) that breaks heavily Democratic almost 2-1 during elections.

The bill also doesn't raise the borrowing limit to avoid threats of a credit default if the debt ceiling isn't raised again come February. For now, Republicans like Ryan are claiming they won't give that away without some form of substantial reform in return — such as a tax code overhaul — and Democrats and their allies are already ramping up the hostile rhetoric in anticipation of it: calling Republican "terrorists" and "hostage takers," claiming they demand a "ransom" for doing something "they're supposed to be doing" (which is allowing foreign interests to own more than 50% of our publicly held debt, I guess). And like before, Obama won't budge from his "no negotiations over the debt ceiling" stance either.

While Republicans still face an uphill battle in accomplishing any of their goals, between a hostile mainstream media and a base that does more to attack Republicans already in power rather than expand the party's power outward, in the end, any potential electoral gains will depend more on the candidates themselves and the parties' GOTV infrastructure than any news stories coming from Washington or media pundits' opinions.