Big Budget Risk as Congress Says ‘See You in September’
Policy + Politics

Big Budget Risk as Congress Says ‘See You in September’

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Here we go again.

Congress departed Thursday for its August recess with a dangerous amount of unfinished business awaiting its return five weeks from now. We’ve not only seen this movie before – we’ve seen its sequel, its prequel, and its TV spinoff.

A breathtaking slew of must-dos await the House and Senate. Congress failed miserably to pass a shared budget for fiscal 2014 after Senate Democrats and House Republicans each backed their own ideological plans.

Of the 12 spending measures Congress must approve, the House has cleared just three; the Senate has yet to approve any appropriations measure. In the past month, the appropriations process has been hogtied as Republicans and Democrats feuded over whether new spending bills should reflect a second round of automatic sequestration cuts that most lawmakers believe are destructive.

And the country’s $16.7 trillion borrowing authority must be increased, or the Treasury could default on the debt for the first time.  The stock market could dip and the economy would be threatened with a reprise of the 2011 economic slowdown. 

House Speaker John Boehner isn’t even looking for a lasting budgetary fix when Congress returns in September. He wants to buy more time with a temporary extension of current spending levels under a continuing resolution.


 “I believe a continuing resolution for some short period of time would probably be in the nation’s interest,” he said Thursday . “Having said that, the idea of operating for an entire year under a CR is not a good way to do business.”
But it’s the way Congress has, in fact, been doing business for the past few years. Already unpopular from almost three solid years of partisan gridlock, lawmakers still seem determined to squander public trust.

“It seems like they’re shifting into an even higher gear of dysfunction,” said Jared Bernstein, a former economics adviser for the Obama administration and now a senior fellow at the left-leaning Center on Budget and Policy Priorities. “I’m getting very nervous about another self-inflicted wound.”

Obama’s new budget director, Sylvia Mathews Burwell, however, still harbors hope a compromise will soon be at hand.  “I don’t know why we just talk about the CR,” she told reporters at a Thursday breakfast hosted by The Wall Street Journal. “Why don’t we talk about the real deal? . . . Why do you need an extension instead of getting your work done?”

Both sides have competing and conflicting interests. It’s not about an ideological divide that perpetually creeps up in sound bites. Yes, Senate Democrats want to partially replace the sequestration cuts with offsetting tax hikes, while House Republicans object to any new revenues.

The House wants to spare the Defense Department another round of tough cuts by forcing domestic programs like transportation, housing programs, and job training to absorb the savings. Obama and congressional Democrats say this is out of the question – and the White House has threatened a veto of spending bills that attempt to gouge programs vital to the middle class.

Senate Majority Leader Harry Reid (D-NV) stressed Wednesday that his priority is showing voters that Congress can actually produce results. “The American people are concerned about two main things: gridlock and doing important things,” Reid told reporters.

The Senate has, in a sense, accomplished some meaningful steps recently. It settled interest rates on federally subsidized student loans  – tying them to the 10-year Treasury yield – just ahead of the new school year. It approved more than a half dozen presidential nominees (including U.N. Ambassador Samantha Power) after breaking a partisan roadblock over filibuster rules. The Senate also passed bipartisan immigration reform that would give many of the 11 million undocumented immigrants a path to citizenship

So senators can tout a series of accomplishments. Some, like Sen. Chuck Schumer (D-NY), can back up his rhetoric about a chamber controlled by Democrats getting things done. Others, such as Texas Republican Ted Cruz – who opposed immigration reform and is fighting to defund Obamacare – can talk about the importance of keeping the fight alive.

The dynamic is quite different in the GOP majority House: Leaders feel constant pressure from the Tea Party to avoid steps that seem to be surrendering to Obama and the Democrats.

Instead, they’ve been committed to messaging bills that stake out hard positions on the IRS, immigration reform and deficit reduction – but have little chance of passing in the Senate or gaining a presidential signature.

GOP congressmen face little pressure from voters to accommodate Obama’s wishes,  an indication Boehner was right earlier this year to say his caucus should not be judged on how many laws are passed but “on how many laws we repeal.”

According to a new poll out Thursday from the Pew Research Center, 54 percent of GOP voters say the party should move in a more conservative direction. “[T]he more moderate wing of the party is a minority generally, and makes up an even smaller share of the likely primary electorate,” said the report.

But Republicans cannot become so ideologically entrenched that they risk another government shutdown like the two in the 1990s or a first-ever default on the U.S. debt. These events would be toxic for the GOP brand. Hence, the desire to approve a stream of continuing resolutions.

“[Their] challenge is to keep the upper hand provided by their strategy of passing continuing resolutions at current levels to fund the government,” said GOP strategist Karl Rove on Thursday in The Wall Street Journal. “They must not overreach… It’s an iron law that Republicans get blamed for any government shutdown, no matter who controls the White House or Congress.”

But it’s been very hard for Boehner to hold his party together on the most important issues – and despite his best efforts he can’t hide the deep fissures in the GOP’s foundations.

As lawmakers were on the verge of taking their summer leave, House Majority Leader Eric Cantor (R-VA) pulled a transportation and housing appropriations measure from the floor that angered some GOP stalwarts who considered the mandatory $4 billion in spending cuts excessive.

Fed up by the straitjacket caused by the sequester and the 2011 Budget Control Act, House Appropriations Committee Chairman Harold Rogers (R-KY) sternly wrote the leadership, “Sequestration – and its unrealistic and ill-conceived discretionary cuts – must be brought to an end.”

Then the Democrat-controlled Senate failed to advance its more costly version of the transportation and housing spending bill when Republicans voted to block it from coming up for a final vote. All Republican senators but one, Susan Collins of Maine, voted against consideration of the bill.

It was the perfect finale to another chapter of government gridlock.

“This has been a sad 48 hours for the American people,” Senate Appropriations Committee Chairwoman Barbara Mikulski (D-MD) told reporters. “This shows exactly why Washington is not working.”