The disarray among House Republicans on the Patriot Act wasn’t the only area of dissent yesterday. In the House Appropriations Committee, Republicans managed to report out a continuing resolution that slashes spending in this fiscal year by close to $40 billion. With defense spending projected to actually increase in the House CR, the net reduction is closer to $32 billion. But appropriators couldn’t accomplish this before almost blowing the vote because of conservative opposition:

Democrats were united in their opposition, but more important for Republicans was the loss of two of their own Western-state conservatives – Arizona Rep. Jeff Flake and Rep. Cynthia Lummis of Wyoming — who voted “no” to protest the cuts being too small.

In a prior closed-door caucus, a third Republican, Georgia Rep. Tom Graves, had also threatened to bolt before being brought around by the committee leadership.

“He saw the light,” Appropriations Committee Chairman Hal Rogers (R-Ky.) told POLITICO.

But in a striking display of defiance, Flake exercised his right to file alternative views in the committee report — something rarely done in Appropriations by a member of the majority party.

The appropriations bill also did not move to cut off implementation funding for the health care law. That will have to be added in an amendment. And who knows what other amendments tea party types will demand as a condition for their vote.

These conservatives are actually playing their role decently. They push for more and more cuts from one side, while Democrats seek a clean continuing resolution with no changes in spending levels – or even cuts directed in different places. The $32 billion cut becomes the middle ground where everyone can safely compromise. And the health care implementation, which the Republican leadership won’t fight for, becomes a chip to be bargained away, so Democrats can say they got something for the spending cuts.

But while it’s far smaller than what Republicans originally promised, it’s enough to hurt the economic recovery, as Council of Economic Advisers Chair Austan Goolsbee reiterated yesterday. In fact, it’s half of the benefit, in dollar terms, from the increased payroll tax cut over the Making Work Pay tax cut. Even while Goolsbee brags about how “Obama’s going to cut the deficit far more in individual years than has ever been cut,” he knows enough to understand that near-term spending cuts would kick the legs out from economic recovery. It also happens to be the complete wrong way to look at the budget, which ought to be an expression of priorities that can maximize jobs and keep prices stable, but that’s a whole other matter. And it’s sadly not the playing field of this Congress.

The continuing resolution plans major cuts, up to 18-20% over current budgets, in areas like labor, health, education, transportation, community development and housing. That cannot have no impact on job creation. We know that public employment has absolutely crashed, and the private sector has not picked up the slack. There’s also a 7.5% cut in the State Department and foreign aid budgets. And of course, while the defense budget is down $13 billion from the 2011 budget request, it’s still up $9.6 billion from the 2010 baseline.

This is almost infinitesimal stuff compared to the overall budget deficit, but the impact will be grave. And of course, it does nothing in the number one deficit reduction area possible – job creation that increases tax revenues.

So conservatives and tea partiers will carp, and they may extract a concession or two. But ultimately, they’re playing a role – pushing the conversation to the right and dragging the economy down with it.

UPDATE: Here’s a list of the cuts, but as National Journal admits, it’s misleading because the cuts are from President Obama’s FY2011 budget request, which never happened. The real cuts are less than half that.