Larry Kudlow
Did Paul Ryan's budget deal save the Republican party from itself? I think it did.

Everyone acknowledges that Ryan-Murray is not a great deal. But the fact is, its passage will avoid a government shutdown. That's crucial.

If the GOP wants to retake the Senate and hold the House in 2014, the key issues must be the catastrophic pitfalls of Obamacare and better economic growth. A shutdown would be a distraction. It would take the heat off Obama and Obamacare, and all the Democrats who falsely promised that if you like your insurance and doctor, you can keep them.

Obama's "like it, keep it" promise was just named the lie of the year in the annual PolitiFact survey. Reminding voters of that lie is much more important than a government shutdown -- which would be blamed on Republicans anyway.

Millions more people will be uninsured over the next year than those who are newly insured. At the very least, hundreds of thousands of people who thought they enrolled in Obamacare via the website will find out they are not enrolled. Sick people will lose their doctors and probably their hospitals. Healthy younger people will, by and large, boycott Obamacare.

In economic terms, Obamacare taxes and regulations are holding back business investing and hiring. And I can add another 5,000 words on the flaws of this state-run health plan. But suffice it to say, those very flaws must be a key ingredient in a Republican takeover next November.

Sure, there are a lot of disappointments with Ryan-Murray. Even Ryan agrees. The worst is that only 70 percent of the sequester is left over the next two years. And although Ryan believes the caps will be restored to 90 percent, that's probably a triumph of hope over experience. The budget caps of the last couple of years have brought down the level of spending and its share of GDP, thereby functioning as a pro-growth tax cut. Losing that discipline is my biggest problem with the deal. But if there's a Republican Senate and House in 2015, the chances of restoring a large measure of budget discipline are better than if the Republicans lose both houses.

The purest path for the budget talks would have been a clean bill keeping all the sequestration budget cuts. But the votes were never there in the House. Defense hawks and others would have left that bill short by 40 to 50 Republican votes. And Democrats would never have supported it. Hence the shutdown threat.

Ryan knew all this. So he went to work with Senator Patty Murray on a common-ground compromise that pleased no one fully, but at least temporarily got the job done and took the shutdown off the table.


Larry Kudlow

Lawrence Kudlow is host of CNBC’s “The Kudlow Report,” which airs nightly from 7 p.m. to 8 p.m.
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