March 1, 2011
This story was updated at 12:15 p.m
Political ideology gave way to pragmatism this week, as the GOP House and Democratic Senate overwhelmingly approved a major spending measure to avert a government shutdown on Friday and buy additional time for congressional leaders and the White House to negotiate spending cuts for the remainder of the fiscal year.
By a vote of 335-91, the House on Tuesday approved a resolution providing enough funds to keep the government operating for another two weeks, while cutting $4 billion in programs. The Senate followed suit on Wednesday, voting 91 to 9 to approve the short-term measure, and then sent it to the White House to be signed before a midnight Friday deadline. In a statement on Wednesday, the President said he was pleased Congress passed the legislation and will sign the bill. He called on congressional leaders to begin meeting immediately to negotiate a longer-term budget plan.
“The only people talking about a shutdown are the
Just over a week ago, House conservatives and freshman Tea Party advocates were demanding $61 billion or more in budget cuts for the remaining seven months of the fiscal year – unprecedented savings strongly opposed by President Obama and Senate Democrats that raised the prospects of a stalemate and a possible government shutdown. Many of the 87 House GOP freshmen who were elected on platforms of fiscal restraint and government downsizing vowed to press for as much as $100 billion in cuts, even if it meant a budgetary train wreck and government shutdown.
media and Democrats. I find that very interesting.”
Amid howls of complaints from Democratic lawmakers, special interest groups and some economists that the cuts would harm the poor and middle class and undermine the economic recovery, GOP leaders began to back down last week. The two government shutdowns in late 1995 and early 1996 proved to be political fiascos for the Republicans, and House Speaker John Boehner, R-Ohio, and Senate Republican Leader Mitch McConnell of Kentucky, wanted no part of another government crisis.
Asked today whether it was safe to assume it was no longer conceivable Republicans would support a government shutdown, Senate Republican Whip Jon Kyl of Arizona told The Fiscal Times: “Correct. The only people talking about a shutdown are the media and Democrats. I find that very interesting.”
A Deal Quickly Cut
Once the White House signaled last week that it would go along with some spending cuts now, along the lines of those outlined by President Obama in his 2012 budget, GOP and Democratic leaders quickly cut a deal for a stop-gap, two-week extension of the budget. It included $4 billion of savings – or about 7 percent of the cuts they originally proposed.
Boehner and McConnell insisted Tuesday that the cuts in the short-term measure were merely an installment on the overall cuts they intend to achieve in future negotiations. "All of us know that cutting the spending of Washington, D.C., never happens,” Boehner told reporters. “And so to think that we're going to have significant cuts in spending levels — it's not going to be easy. I understand that.” McConnell agreed that even achieving $4 billion in cuts was a major event in Washington, but said he expects to get considerably more in savings before year’s end. “I would like to see us adopt the House position of $61 billion in cuts,” McConnell said optimistically.
But much of the bold talk about confrontation with the White House and a government shutdown has dissipated, and all but one House Republican freshman – Rep. Justin Amash of Michigan – voted in favor of the short-term measure. On his Facebook page, Amash wrote, “I support the efforts of my GOP colleagues to move the budget process along so that we can work toward serious spending reductions. Unfortunately, this budget cuts spending at the rate of only $133 million a week or $6.95 billion a year. That's four-tenths of one percent of our annual deficit.”
In all, only six Republicans voted against the short-term spending continuing resolution, including Rep. Michele Bachmann of Minnesota, the head of the House Tea Party caucus, Louie Gohmert, Tex., Walter Jones, N.C., Steve King, Iowa and Ron Paul, Tex. House Democrats were divided on the measure: 104 Democrats backed it while 85 opposed it.
Economic Recovery Concerns
An issue very much on the minds of lawmakers today was whether cutting the budget at this point would seriously set back the economic recovery, making it difficult to bring down the 9 percent unemployment rate. Mark Zandi, chief economist with Moody’s Analytics, said the initial $61 billion plan would reduce U.S. economic growth by 400,000 jobs by the end of 2011 and 700,000 jobs by the end of 2012. Goldman Sachs released a similar report to clients that said the House spending cuts would harm U.S. economic growth by about 2 percentage points in the second and third quarters of this year.
Republicans rejected the spending cut charges and were quick to embrace the non-partisan Government Accountability Office (GAO) report released Tuesday on wasteful and duplicative government spending. “Enough is enough,” House Majority Leader Eric Cantor of Virginia said in a statement. “Our Congress is about delivering results.”
The two parties, which have clashed repeatedly over the past few weeks over how much to slash from a $1.1 trillion proposal to fund the government, have been facing a March 4 deadline to reach an agreement, when government funding expires.
Although some Democrats said they were “encouraged” by the revamped House GOP plan, many remain skeptical about the two-week strategy.
“It looks more like they're less concerned about putting a workable budget together than they are about shutting down government,” Rep. John Larson, D-Conn., told reporters Tuesday morning. “And whether it's death by a thousand slashes or over a two-week period, it seems to be that that's their ideological bent in terms of shutting down the government.”
Rather than pressing to achieve all the cuts they promised during last fall’s campaign, House GOP leaders now are saying they are prepared to take a more piecemeal approach. House Chief Deputy Whip Peter Roskam, R-Ill., said this week that his party can achieve their goal, step by step. “You can do it,” he told the National Journal. “You just got to do it $1 billion at a time.”
Scores of federal agencies and hundreds of programs that were targeted in a spending cut measure passed by the House Feb. 19 were granted a temporary reprieve today in the resolution approved by the House – but a score of programs didn’t escape the budget cutting knife. Here are eight programs totaling $1.24 billion that will be put on the chopping block:
- Election Assistance Grants: $75 million
- Broadband Direct Loan Subsidy (U.S. Department of Agriculture): $29 million
- Smithsonian Institution Legacy Fund: $30 million
- Striving Readers program (U.S. Department of Education): $250 million
- LEAP program (U.S Department of Education): $64 million
- Even Start (U.S. Department of Education): $66 million
- Smaller Learning Communities (U.S. Department of Education): $88 million
- Highways – Additional General Fund spending (Federal Highways Administration): $650 million
This list terminates programs President Obama has proposed to eliminate in his 2012 budget request. The remaining $2.7 billion of savings come in the form of earmark and special project terminations.
The White House has signaled an interest in extending the life of the measure to fund the government to a full month, which would allow more time for the administration to become engaged in the House-Senate debate.
House Taking up Stop Gap Spending Bill (The Washington Post)
Homeless Veterans Could Lose Housing Subsidies (CNN)
House GOP Rejects Charges Spending Cuts Would Hurt Economy (NPR)