Budget Brawl Gives Ted Cruz, Rand Paul a Chance to Break Out

A long, hot summer of budget battles could have a political payoff.

Senator Rand Paul, R-KY, speaks to the press at the Senate after speaking in the chamber at the US Capitol in Washington, DC on May 31, 2015.

Photographer: Andrew Caballero-Reynolds/AFP/Getty Images

Ted Cruz and Rand Paul have created national profiles by picking fights in the U.S. Senate, and the two Republican presidential rivals will soon have a chance to engage in another, as they oppose efforts to roll back automatic spending cuts enacted as part of a 2011 budget agreement.

It's a brawl that will allow them to portray themselves as principled guardians of the public purse against a classic Washington establishment combine: Republicans who are worried about cuts to the Pentagon budget and Democrats who didn't want spending cuts in the first place.

Paul is already firing off warning shots. “I think there are a great deal of problems for people who want to argue that they are fiscal conservatives and yet would simply borrow hundreds of billions of dollars for defense,” Paul said in an e-mail last week. “I think it’s irresponsible and dangerous to the country.”

Senator Ted Cruz arrives to a hearing in Washington on June 4, 2015.

Senator Ted Cruz arrives to a hearing in Washington on June 4, 2015.

Photographer: Andrew Harrer/Bloomberg

Considering the political forces arrayed against them, the two Republican rebels are unlikely to prevail in the legislative fight. But they could win politically even as they lose legislatively, scoring important points with Republican fiscal conservatives.

One of two high-stakes battles that will dominate the next several months in Congress (the other will be over Obamacare if the Supreme Court upends the president's health care plan before the end of the month), the spending debate is just getting underway. It will start with the Senate debate over a defense spending bill—which Senate Majority Leader Mitch McConnell has identified as his next legislative priority—and continue through the fall when Congress will have to raise the debt ceiling.

Widening divisions

The budget and spending fight highlights widening divisions in the Republican Party between conservatives like Florida’s Marco Rubio, concerned about shoring up the military, and Tea Party-aligned Republicans, like Cruz and Paul, more committed to limiting the size of government. They are all seeking the 2016 Republican presidential nomination.

The politics of the federal budget—which has tied Congress in knots for five years—are changing as the U.S. budget deficit improves and the Republican Party places a greater priority on military strength and national security concerns amid terrorism threats in Syria and Iraq.

McConnell of Kentucky will work to cut a deal with Democrats while Paul, Cruz and other Tea Party-aligned lawmakers will be “very obdurate and standing firm on their ground,” said Steve Bell, a former Republican Senate budget aide. “Over the next four or five months you’re going to see more clearly than ever the Balkanization of the Republican Party,” aid Bell, a senior director at the Bipartisan Policy Center in Washington.

Defying leadership

The debate will put Paul and Cruz, once again, at odds with their leadership. They’ve divided with McConnell on past spending agreements as well as issues like surveillance laws.

The first policy proposal Paul announced as he declared his presidential bid was a plan to require a balanced federal budget every year. Last year, Cruz tried to stop the Senate from allowing an increase in the debt ceiling without offsetting spending cuts by forcing a 60-vote threshold.

More recently, Cruz has shown some signs of conflict. In March, he voted for an amendment sponsored by Rubio to raise defense spending with no corresponding cuts. Cruz’s office makes the point that he also voted for a separate amendment requiring spending offsets.

Political opportunity

The battle will be an opportunity for both Paul and Cruz to curry favor with grassroots activists by going against their party’s leadership. Yet it also pits them against some voters.

Polls show concerns about U.S. debt and deficits, which as recently as 2013 were the top issue after the economy, have dramatically diminished, falling behind such other issues as immigration, health care and foreign threats.

“Nobody gives a rat’s a-- about debt or deficits and that’s the truth, even among Republican voters,” said Bell. Terrorism and the economy “are much more potent issues right now.”

Senator Lindsey Graham recently highlighted the coming intra-party fight, which could spill into a debate over the debt ceiling this fall, and suggested it as a way for voters to distinguish more responsible Republican presidential contenders from grandstanders. “At the end of the day, something has to be done; we can’t default,” he said told reporters at a Republican gathering in Utah. “This is going to be a challenge for our party.”

“There will be a bunch of people in our party and in theirs saying ‘no, no, no.’ Somebody’s got to find a way to say ‘yes,’” Graham said.

But the Republican family feud will be on display sooner than the debt ceiling fight: McConnell has said that a defense spending bill is his next priority.

This will “trigger some larger discussion or confrontation” over spending cuts slated to take effect starting in the new fiscal year in October, said Oklahoma Representative Tom Cole, a Republican close to House Speaker John Boehner.

Reid’s vow

While Republicans are saying they want to raise defense spending and find cuts elsewhere in the budget, Senate Minority Leader Harry Reid, a Nevada Democrat, has vowed to block all spending bills until Republicans consider easing the automatic cuts known as sequestration.

Earlier this month, the Senate voted to use a special off-budget war fund to evade Pentagon spending caps and swell funding by $38 billion. Democrats have called the approach a gimmick and plan to block a defense spending bill that relies on it unless Republicans agree to relief for domestic programs. President Barack Obama has also vowed to veto the measure.

There’s no way, according to outside budget experts, that Congress will allow the full cuts to take effect. Easing them could come in the form of a new budget deal or a return to funding the government via short-term spending agreements.

Democrats are setting the stage for an agreement similar to one they cut with Republicans in 2013 that led to $45 billion in higher spending last year.

'Terrible policy'

“This really shouldn’t be difficult,” said Patty Murray, a Washington Democrat who negotiated the 2013 deal. Democrats and Republicans agree the cuts “are terrible policy.”

Republican leaders are likely to cave to Democratic demands for greater domestic spending to avoid $35 billion in cuts slated to hit the Defense Department beginning in October, said Bell.

The budget deficit for the current fiscal year, which ends Sept. 30, is $468 billion, or 2.6 percent of gross domestic product and below the average share for the past 50 years, according to the Congressional Budget Office. It is slightly improved from the 2014 deficit of $483 billion and considerably improved from the $680 billion shortfall for 2013.

Escaping the cuts

Congress has acted to soften the sequester’s effects every year since it was enacted, including the two-year agreement Murray brokered with Representative Paul Ryan, a Wisconsin Republican.

Yet finding the savings the way Murray and Ryan did—by boosting fees and other low-hanging fruit in the budget–becomes significantly more difficult without also targeting entitlement programs like Medicare and Social Security. Democrats won’t allow that without tax increases, which Republicans won’t agree to.

“Republicans want to bust the sequester on defense,” said Stan Collender, executive vice president of Qorvis MSL Group, a communications strategy firm in Washington, and former House and Senate budget aide. “Democrats say we’ll give you the money on defense if you relieve domestic agencies. That’s almost an old-fashioned coalition. Whatever you call it, it’ll simply allow more spending.”

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