There is no small irony that House Speaker Paul Ryan, who came in promising a new “inclusive style of leadership,” should find himself mired in the same bruising battles former Speaker John Boehner faced with the dissident Freedom Caucus wing of the Republican House. It now seems unlikely that Ryan will get the party support he needs for a budget resolution any time soon.
As Ryan is now discovering, it wasn’t Boehner the person the House Republican dissident “Freedom Caucus” fought so bitterly against, it was the very process of finding common ground with President Obama and the Democrats.
*** Ryan in fact has an even larger political battle on his hands. Both he personally and the budget process are now being drawn into the political brawl over who will be the party’s presidential nominee. The conflation of the two not only threatens to derail the convention policy platform, but it could also further deepen the splits within the GOP when, we suspect, Texas Senator and presidential candidate Ted Cruz and the Freedom Caucus dissidents may force a “showdown over a shutdown” in government spending in late September, less than six weeks before the November elections. ***
*** Paradoxically, while the populist candidacy of Donald Trump has so many in the much touted Republican “establishment” reaching for their Pepto-Bismol, Trump’s march to the GOP nomination could prove Ryan’s saving grace. Albeit more by default than design, Trump’s anger-fueled insurgency could overwhelm the support behind the House Freedom Caucus fiscal rebellion, sweeping them aside like yesterday’s revolutionaries, freeing up enough votes for Ryan to work with Democrats to seal the deal on the F2017 budget. ***
*** And Ryan as the highest elected GOP official could return the favor, in this case by design rather than default, by helping both to boost Trump’s “legitimacy” going into a potential contested convention and in Trump re-positioning in a pivot as a general election candidate. How the budget battle plays out, in other words, is likely we believe to play an unexpectedly large role in shaping the GOP convention, and indeed, may help tip the probabilities in whether the currently schism-racked Republican Party can win the White House in November. ***
What’s more, almost as an aside amid such a volatile election year, it may also determine whether the US recovery will continue to be lifted with a fiscal tailwind that takes some of the pressure off a dovishly-turning Federal Reserve as the sole source of stimulus to growth.
House Speaker Ryan and Senate Majority Leader Mitch McConnell went into this election year determined to show the GOP can govern by bringing to an end the previous years of fiscal cliffs, shutdowns, and default threats with a return to “regular order.” They are, or were anyway, pressing an ambitious legislative pace to pass a Joint Budget Resolution by April 15 and to wrap all 12 FY2017 spending bills by the mid-July GOP convention.
To that end, House Budget Committee Chairman Tom Price marked up and moved his Budget Resolution out of committee earlier this week.
Ryan, who will be chairing the GOP convention, wants to use the budget as a cornerstone to a conservative policy agenda that would be unveiled at the convention, with deeply rooted GOP positions on tax reform, immigration, trade, and even fighting poverty. Coming out of the convention, Ryan envisions “a keel and a rudder” to give the GOP a unifying agenda.
And, if truth be told, he also wants to lay out a party platform that Republican Senators and Congressmen can run on in case the presidential politics go off the rails.
In theory, the budget resolution should easily pass since the top line spending total of some $1.070 trillion in discretionary spending was already set in last year’s Bipartisan Budget Act. The BBA raised federal discretionary spending by some $70 billion, split between GOP-demanded increases in defense spending to $551 billion and in the Democratic-dictated increases in non-defense social spending to $518 billion.
Price’s budget resolution, nevertheless, includes such draconian instructions to appease dissident fiscal hawk objections that few, if any, Democrats will vote for it, meaning it can only pass in a House floor vote with at least 218 all Republican votes.
And that, Ryan is not going to get, at least for now. The so-called House Republican “Freedom Caucus,” led by Ohio Congressman Jim Jordan and claiming between 40 to 60 members, is demanding a rejection of last year’s budget agreement and a cut of at least $30 billion from the budget, all of which would come on the Democratic programs — and an end to Obamacare of course.
To avoid facing his own “Boehner moment” in yet another revolt by the GOP House dissident wing, Ryan has had to shelve the budget resolution vote until after the Easter recess, or well into the second half of April, making it harder to wrap up the 12 spending bills as planned by mid-July.
The Budget Resolution can be abandoned, albeit at the price of yet another humiliating retreat by the GOP Hill leadership, with the appropriate Committee Chairs pushing ahead to mark up their individual spending bills. But it would inevitably prolong the appropriations process and most of all, leave the GOP vulnerable to making new concessions to Democrats in order to pass them. And the Democrats would only be too happy to pounce on the Republican splits, diluting the GOP control over the federal spending priorities into the first year of the next Presidency and Ryan’s intended political messaging in this year’s campaigns.
Furthermore, the stalled budget process is likely to get ensnared in the brawl of the presidential campaigns, namely in that Texas Senator Ted Cruz, who describes himself as the “consistent conservative warrior,” is likely to throw his political weight behind the fiscal revolt, especially if he is on the losing end of the nomination process, which to us seems likely.
And Ryan himself is being bandied about a white knight presidential candidate to emerge from a contested convention, even though he quickly moved to end the speculation, snapping at Boehner to “knock it off” when the former Speaker proposed him as an alternative presidential candidate.
If the rebellion cannot be put down in short order, the Republicans are looking at a potential nightmare scenario in which stalled spending bills could force Congress to be called back from election campaigning in September to pass a Continuing Resolution or an Omnibus bill to avoid yet another threat of a government shutdown on October 1, just days before early voting begins to determine the next President, and which party dominates the next Congress.
Trump as Savior
The way Ryan works his way out of either facing down the dissident rebellion or enduring a humiliating retreat is where this all gets truly interesting, namely, in the interplay between the GOP’s Capitol Hill budget machinations and the maneuvering in the presidential nominee campaigns between front runner Trump and his remaining two rivals, Senator Cruz and Ohio Governor John Kasich.
And what could save Ryan, ironically, is likely to be Trump. The anti-establishment, anti-Washington, New York billionaire and newly reinvented populist is the only politician right now who may end up peeling away enough of the Freedom Caucus supporters to enable Ryan to pass his budget with a minimum of Democratic crossover votes.
It has not gone unnoticed that Trump, and Trump alone, increased GOP voting numbers by 81% on Super Tuesday, pulling in Independents and Democrats. And nearly half the Republican base voters are already drifting over to support the “new strongman” of the GOP, in effect dissecting and unraveling the unity of the remaining far right House Republicans.
After all, you can only have one revolt at a time, and Trump is the face and voice of the new rebellion, sweeping aside yesterday’s revolutionaries, like the House Freedom Caucus or even Cruz, who is ideologically aligned with them; like Alexander Kerensky in 1917, they could be shunted to history’s footnotes by Trump and his Bolshevik-like revolution.
In the scenario unfolding, the House dissidents will soon be forced to choose between joining Trump — who owes them nothing and is hardly a “starve the beast” budget ideologue to say the least — or staying true to the purity of their principles but face political oblivion in an election year where the only ideology will be winning. We suspect many if not most of the Freedom Caucus members will refuse the latter, and as a result the clout of the Caucus leadership will begin to dissipate.
And Trump has gained even more political ground within the party in just the last 48 hours.
While one minute capturing headlines with suggestions there may be riots in Cleveland if he is denied the GOP nomination, the next minute Trump has jumped behind the scenes to make nice with the party establishment and donors, making it that much easier for them to slide his way. And just in case, Trump is already working behind the scenes to secure enough commitments on delegates to ensure he clears the 1,237 hurdle of votes needed to win nomination on a first ballot.
The decisive primary will probably not be until April 26 in the Pennsylvania, winner-take-all, closed primary. Trump is ahead in the polls there even though by all accounts Kasich should have a head of steam in the state where he was born, especially considering his win in the next door home state of Ohio. A loss there by Kasich we believe would invariably mean suspending his campaign, like that of Florida Senator Marco Rubio. But by suspending rather than ending their campaigns, the candidates keep control of their delegates, which they can then use to bargain for position or platform at the convention, especially if the nomination blows open in a second ballot.
Ryan, as the highest ranking elected Republican, does not need to overtly help Trump. Where Ryan enters into the presidential political fray is in staying out of Trump’s way but at the same time facing down Cruz as a Senator within the halls of Congress who is very likely to align with the Freedom Caucus dissidents. And that in turn, burdens Cruz the presidential candidate.
And assuming Trump does win the GOP nomination, Ryan’s role may also then be in patiently steering Trump further in from the establishment cold, as the now general election candidate ratchets down his rhetoric to sound more presidential while perhaps even pivoting more to the center and showing a willingness to cut deals through compromises.
The over-the-top billionaire is already admitting to some flexibility in his hardline immigration policies. He’s also pledging to moderate his aggressive tone, acknowledging that women in particular might be turned off by his brash brand of politics, as he emphasizes the importance of flexibility on issues; “there always has to be some tug and pull and deal,” as he puts it.
Whether Trump has the kind of self-discipline to keep that up is anyone’s guess — we suspect he does — and for that matter who knows if he will indeed nail down the GOP nomination – although we expect he will.
But for all the vitriol currently being thrown at him, Trump, with a key assist from Ryan — himself originally a “movement Conservative” — may soon turn into the crucial ally, if not savior, of the GOP establishment.