Bush’s signature high-end tax cuts have been extended during President Obama’s first term. GOP eyes return to Bush budget

To the surprise of even themselves, the Republicans’ battle cry in the budget wars this year comes down more and more to one refrain: “Bring back Bush.”

Already, George W. Bush’s signature high-end tax cuts — once opposed by the current White House — have been extended through the life of President Barack Obama’s first term. And having blocked a bipartisan compromise, Republicans now want Obama to roll back domestic appropriations to the 2008 levels set in a Christmas omnibus bill three years ago — truly the last major budget measure of the Bush presidency.


That giant bill, covering all agencies but the Pentagon, is very much the intellectual framework behind the GOP’s promise to tea party supporters that it will cut $100 billion in government spending its first year. The Defense, Homeland Security and Veterans Affairs departments are largely exempted. But appropriations for all other departments would be capped at the $378.4 billion level allowed in the Bush deal — nearly $100 billion less than Obama’s 2011 request and $84 billion, or 18 percent, below current levels.

Within these limits, adjustments could be made. But for many departments and agencies, including the State Department, Environmental Protection Agency, Small Business Administration and Indian Health Service, the Bush 2008 spending levels mean reductions of far larger than 18 percent. The maximum Pell Grant for low-income college students, an Obama priority, could drop 24 percent below what it is today. Federal support for training new nurses — a source of jobs and a prerequisite for expanded health care — would be 36 percent less than current spending and half of what Obama asked for in his 2011 budget.

It’s a defining fight for Obama and one in which Republicans seem intent on almost humiliating him — “the president of change” — with no change at all.

Obama’s health and financial agencies would also be denied funds to implement new reforms: The Securities and Exchange Commission could end up with almost $400 million — 30 percent less than Senate Democrats proposed last month, for example. And each domestic cut makes it harder for Obama, the onetime anti-war candidate, to hold onto his liberal base when he will still be spending $120 billion a year on military operations in Afghanistan and Iraq.

But for Republicans, too — beginning their House retreat in Baltimore Thursday — there are real risks.

At the GOP’s insistence, the entire government remains dependent on a stopgap continuing resolution, known as a CR, that next expires March 4 — less than two months away. And having demanded this timetable to gain leverage over Obama, Republicans privately admit they feel like the surprised dog that chased the bus — and caught it.

“I thought we were going back to 2008 in 2012,” one leadership aide said ruefully.

Indeed, House Republicans concede it will take two bites at the apple — including the 2012 appropriations cycle next summer and fall — before they have any chance of getting to their 2008 target.

“We will meet our commitment to the [Pledge to America] in this calendar year,” Speaker John Boehner (R-Ohio) said last week. “There’s no ifs, ands or buts about it.”

But in the interim, Boehner faces a difficult vote for his new tea party members on raising the debt ceiling in April or May. For this reason, there’s a strong desire to make some down payment first toward deficit reduction in the earlier CR fight — but also the caution that if the cuts come too deep, too fast, agencies will be forced to lay off workers at a time of already high unemployment.

Two December volumes of the Congressional Record, almost exactly three years apart and each fat with the fine print of appropriations tables, spell out the stakes ahead.

The first, dated Dec. 17, 2007, details the Christmas deal with Bush, which came after veto fights in which many Republicans joined Democrats in demanding more money for education and health programs. The second, dated Dec. 14, 2010, compiles current spending and a failed bipartisan Senate attempt to salvage something of Obama’s 2011 budget in the lame-duck session last month.

That proposal, which made its own cuts of $26 billion, died on the vine, a victim of Republican opposition and White House indifference. The administration denies any culpability, but the whole episode left a bad taste in the mouths of many Democrats, who question how hard Obama will be willing to fight to save the programs at risk.

Prior to March 4, the administration will have two opportunities to address this concern: Obama’s State of the Union address, likely Jan. 25, and the rollout of his new 2012 budget, expected in mid-February.

“I don’t ever think of myself as fighting for spending in and of itself — and in this climate, that wouldn’t make sense,” Jack Lew, the president’s budget director, told POLITICO. “But we will fight for our priorities and to get things done.”

Lew’s own role is important, given the personal respect he enjoys and his long history of interacting with lawmakers, first as a top aide to the late Speaker Tip O’Neill in the 1980s and later as part of Bill Clinton’s Office of Management and Budget. But Obama continues to pay a price for the often arrogant style of Lew’s predecessor, Peter Orszag. And if the president is to make an effective stand now, the White House and Appropriations Committee Democrats must learn to work better together, especially in the Senate, Obama’s last line of defense.

Republicans have their own adjustments to make. The Senate Appropriations Committee will see wholesale change on the Republican side with the departure of so many members and the likes of Sen. Lindsey Graham (R-S.C.) now toying with joining the panel. “It’s a chance to change the culture of spending,” he told POLITICO.

In the House, the new Republican leadership stands out for how divorced it has been from the Appropriations Committees over the years. There’s little appetite for weighing into the details, as in the failed omnibus bill attempted by the Senate, where top leaders in both parties are veterans of the appropriations process. Instead, the House response March 4 seems more likely to be a streamlined, seven-month extension of the current CR, with lower spending rates and likely rescissions from prior appropriations.

In their own ranks, House Republicans face growing pressure to allow additional funding for the Pentagon, now frozen at 2010 levels and well below what Defense Secretary Robert Gates says he needs to get through Sept. 30. One option would be to provide relief here and for other security-related functions and then try to put pressure on moderate Senate Democrats to accept lower domestic spending.

The current continuing resolution sets rates according to what agencies got in their 2010 appropriations. For the second half of the fiscal year, the rates could be set according to 2008 appropriations, for example; or the GOP could simply impose its own across-the-board reduction on 2010 spending.

Clerks have begun the process of looking for past discretionary appropriations to be rescinded. And to make for a bigger-looking package, Republicans could also target billions for food stamps or “mandatory” health-care-related appropriations such as the wellness fund authorized in health reform.

This week’s party retreat in Baltimore, running through Saturday, features Republican veterans of past budget battles: former Texas Sen. Phil Gramm and House Speaker Newt Gingrich. It’s also an opportunity for the leadership and House Appropriations Committee Chairman Hal Rogers (R-Ky.) to begin to test strategies.

Watching is House Budget Committee Chairman Paul Ryan, who will have a critical role in setting the cap for all discretionary spending for fiscal year 2011. Thus far, the Wisconsin Republican shows no sign of backing away from the $1.029 trillion cap tailored to the earlier computations imposing Bush-era spending levels for domestic programs.

When a reporter suggested that an $84 billion cut from 2010 spending was “a lot of money,” Ryan seemed unfazed.

“For some people,” he said.