GOP Winning the Budget Battle, but May Lose Economic WarAs a result of President Barack Obama's signature Friday on another continuing resolution -- one that will keep the U.S. government funded until April 8 -- the contours of Washington budget battlefield are now visible.

First, the Republicans have won the 2011 battle over discretionary spending: It's going to decline substantially this year. The most recent continuing resolution cuts an additional $6 billion from this year's budget, bringing total cuts to about $10 billion. The stop-gap funding measures have been required because Congress has yet to approve a full budget for the current year, fiscal 2011.

Second, unless the more extreme wings dominate the Republican and Democratic party caucuses -- which isn't likely -- there will not be a federal government shutdown.

Washington's Austerity-Oriented Mood

The only questions remaining for the 2011 budget concern how much the budget will be cut for the full fiscal year, and the fate of "riders" -- policy-based items added to the bill.

As of Monday, the two parties were about $50 billion apart on the issue of what represents a reasonable cut in discretionary spending for this year. The Republican-controlled House has passed a bill with $61 billion in spending cuts -- a guaranteed non-starter in the Democratic-controlled Senate. The Republicans in the House also passed a stand-alone bill to defund National Public Radio for a savings of around $5 million. That bill faces strong opposition from the Senate and the White House, thehill.com reported.

If the previous two continuing resolutions are any indication, Senate Democrats probably will agree to another $25 billion to $30 billion in cuts, which would bring the total for fiscal 2011 to $35 billion to $40 billion. That's a substantial amount, but nowhere near the roughly $100 billion in budget cuts sought by the Tea Party, the GOP's conservative faction.

But it's hard to image either Senate Democrats or President Obama giving any consideration to Republican-backed riders to block implementation of the health care reform act or to block aid to Planned Parenthood. Senate Minority Leader Harry Reid (D-Nev.) said his reaction to many of the GOP riders was "not only no, but hell no."

GOP: Not the Party of Workers

Although the Republicans may have won more ground in the battle to cut discretionary spending, history suggests this isn't a good time for the GOP to conclude that they now have the eternal loyalty of the American people.

That's because a much bigger problem awaits the Republicans: America's 8.9% unemployment rate. In the past, the Republican Party has shown a remarkable tone deafness to the typical person's struggles -- the plight of workers, the Americans who built and continue to build this country. In 1932, in the depths of the Great Depression, President Herbert Hoover didn't believe public policies could lower the nation's high unemployment rate, and acted accordingly. In 1995, when House Speaker Newt Gingrich (R-Ga.) shut down the federal government, he asserted that few Americans would complain about the disruptions it would cause. In both cases, the people found those positions wanting.

So far, there's nothing to suggest that today's Tea Party-led Republican have changed their view regarding the plight of workers from what it was 15 or even 80 years ago. If the GOP doesn't adapt rapidly, and the problem of unemployment worsens, the 2009 Democratic-backed economic reforms will, in retrospect, look very minor. And the GOP wins of 2010 could look very temporary.

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