It took months of fighting — the threat of a government shutdown, the graver threat of a default on the national debt, and now a new threat of major, automatic cuts to Medicare and defense programs — but Congress’ deficit obsession has finally exposed the rarest of all species: Republican Keynesians.
With just a under a month until the deficit Super Committee must recommend policies that cut the 10 year deficit by $1.2 trillion, members of the Republican party — the same party that’s been on the war path for deep spending cuts, and that decries President Obama’s “failed stimulus” — are making uncharacteristic arguments against slashing spending. Trim too much, too quickly, they warn, and people will lose their jobs!
Call them Defense Keynesians — GOP members who represent defense interests, veterans, service members, contractors, and others whose livelihoods would be impacted by deep cuts to defense spending. They don’t want the Super Committee to cut much more, if any, from defense, and they certainly don’t want to pull the so-called “trigger” which would cut defense across the board by about $600 billion starting in 2013, if the panel gridlocks.
In testimony before the Super Committee on September 13, CBO director Doug Elmendorf cautioned members that deep, quick cuts to government spending of all kinds would harm the feeble economic recovery, perhaps severely. Late in the hearing, as if reading from the General Theory, Sen. Jon Kyl (R-AZ) drew the obvious corollary: “[T]hat’s true of defense spending as much as other spending. Is that not correct?” he asked
“It’s true of potentially all types of spending,” Elmendorf said. “There may be differences across types. But I think that’s a more subtle distinction.”
Kyl went on, “And here, with defense, for example, you’ve got high unemployment of returning veterans to begin with. You have reduction in end strength. You’ve got more people potentially unemployed. You got people making radios and building ships and so on. And if those cuts, therefore, end up reducing the employment in those industries and the amount of money spent in those areas, obviously it could delay economic recovery.”
“Yes, that’s right, Senator,” Elmendorf responded.
“Thank you,” said Kyl.
In the month and a half since then, this point of concern has spread throughout the GOP, culminating this week and last in a major push by Republicans on the House Armed Services Committee to forestall further significant defense cuts. They make many arguments. But among them is one you won’t hear Republicans apply to health care, education, research, or safety net programs.
“What’s more, cutting our military–either by eliminating programs or laying off soldiers–brings grave economic costs,” wrote Chairman Buck McKeon (R-CA) in a Wall Street Journal op-ed last week. “[I]f the super committee fails to reach an agreement, its automatic cuts would kill upwards of 800,000 active-duty, civilian and industrial American jobs. This would inflate our unemployment rate by a full percentage point, close shipyards and assembly lines, and damage the industrial base that our warfighters need to stay fully supplied and equipped.”
“Should another $600 billion in cuts come to pass, at least 200,000 pink slips could be delivered to active-duty warfighters; at least 13 percent of our servicemembers will be forced out,” wrote Rep. Randy Forbes (R-VA) in Stars And Stripes last week. “Another 200,000 job losses will come to Department of Defense civilians working at installations across the country. We would be asking 1 in 4 highly skilled defense civilians to leave service.”
In an impact assessment last month, Armed Services Committee staff concluded that deep budget cuts — or, worse, the $600 billion trigger — would eradicate military, civilian defense, and defense industry jobs.
There’s truth to that. But where have these guys been the last 10 months?
Since they took over the House of Representatives in January, the GOP has been on a single-minded pursuit of deep cuts to almost to all other federal programs. They fought for $100 billion in immediate cuts to so called non-defense discretionary programs — education, research, health care, and others that receive annual funding from Congress — and $2.4 trillion in further cuts over 10 years to both discretionary programs and programs like Medicare, that are funded automatically.
That was the GOP agenda, despite a crippled economy, and despite warnings from economists that cutting government spending during a time of weak consumer demand would make things worse and could even risk a second recession.
Over the last 10 months, the GOP has dismissed or denied those warnings, in a number of ways. In the early days of the 112th Congress, House Majority Leader Eric Cantor (R-VA) touted the Republicans’ vision of a “Cut & Grow” economy — one that somehow produced new jobs as the result of a trimmed federal government.
During a February press conference House Speaker John Boehner (R-OH) acknowledged that GOP-pushed cuts would likely result in public sector job losses but, he said, “If some of those jobs are lost so be it. We’re broke.”
Other Republicans stick to the notion that cutting simply implies more jobs. In March, Rep. Jeb Hensarling (R-TX) knocked Democrats for failing “to produce any credible plans that cut spending in order to grow the economy.” And later, as co-chair of the Super Committee claimed “a path to credible deficit reduction is a jobs program.”
I asked Boehner about this apparent contradiction at his weekly press conference Thursday. He didn’t address it head on.
“When you look at the defense cuts that are going to come as a result of the deficit control act and the caps on discretionary spending, I would argue that they’ve taken more than their fair share of the hits,” Boehner said. “When you look at what’s yet to be done by the Super Committee — almost all that’s going to fall in the area I think of mandatory spending. Which is more than two-thirds of the budget. And it’s time for us to do our work there.”
That sums up the GOP game plan pretty fairly. Still it’s hard to escape the conclusion that the only thing Congressional Republicans find more abhorrent than Keynesian economics is austerity for programs they like.
