The Looming Budget Showdown

With the government poised to shut down on Friday for lack of funding, Congress got its act together (barely) and passed a spending bill on Tuesday to keep things running for another two weeks while Republican and Democrats hash out their differences over how much to cut from the 2011 budget. Talk about waiting until the last minute.

The "compromise'' was really nothing of the sort. Democrats accepted $4 billion in cuts, but sacrificed nothing that had not already been targeted by President Obama. Republicans allowed negotiations to continue but conceded no more. Meanwhile, neither side has backed away from its entrenched public position. So a shutdown may have been averted, but a showdown still looms.

At the outset, there were three parties to this struggle: Democrats, traditional Republicans, and Tea Party Republicans, many of them elected on a pledge to cut $100 billion from Obama's 2011 budget. The Republican leadership initially said it would cut about $30 billion, but was quickly made to understand that so paltry a sum was unacceptable to its activist base. And so the leadership compromised -- capitulated is a better word -- and agreed to cut $61 billion (which is equal to $100 billion prorated over the entire fiscal year, the current one ending in September). Rather than narrowing the gap, the major concession has been within the Republican Party and served only to widen it.

With both parties moving in the wrong direction, agreement is hard to imagine. The prevailing mindset in Washington is so shot through with polarization and paranoia that some lawmakers won't utter the word "compromise'' for fear of seeming pusillanimous and coming under attack from their party faithful.

Ironically, poll after poll has shown that compromise is precisely what Americans want. Anywhere from 60 to 80 percent say that they want lawmakers to work together on the nation's problems. This probably accounts for both parties' reluctance to quit negotiating and let the chips fall: it's not clear who would get the blame. A Washington Post poll this week showed that 36 percent of voters would fault Republicans, while 35 percent would blame Democrats. One party would surely prevail, but no one can know ahead of time which it would be.

More than most budget quarrels, this one is driven by ideology. Republicans believe the midterm election results were not simply an expression of frustration over the weak economy and high unemployment, but a mandate for them to impose sharp cuts in spending. They're pursuing these even though they would make little difference to the long-term deficit, since they don't attack its root sources: Medicare, Medicaid, and military spending.

Democrats, by nature disinclined to cut government, nevertheless make a plausible case that the Republican plan would imperil recovery. A recent Goldman Sachs report estimates that it would trim GDP by 1.5 to 2 percent a year; and destroy 700,000 jobs by the end of 2012, according to the economist Mark Zandi, a onetime adviser to John McCain. But not everyone agrees. Federal Reserve chairman Ben Bernanke, among others, has said it would not pose a meaningful threat.

To position itself if a shutdown can't be avoided, the White House has shown a willingness to make reductions -- such as Obama's proposed five-year freeze on discretionary spending, which would save $400 billion -- hoping that this will engender public support, while still allowing it to protect cherished programs. Even as Senate majority leader Harry Reid was backing the temporary spending bill, he seemed to be expecting a confrontation: "The president's going to take this to the American people because the only message that we have from the Republicans is to wipe out programs that are so important to people.''

There is still time to avoid a shutdown and reach a settlement. But the direction of recent events suggests that this isn't likely. Republican Wisconsin Governor Scott Walker has used the occasion of a budget gap to launch an ideological battle against collective bargaining for public-employee unions, which has set off national protests and energized activists on both sides. The lesson there -- and here -- is that ideological conflicts rarely end in compromise.

Joshua Green writes a weekly column for the Boston Globe.

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