StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



Budget Bedlam This Fall

04 Aug 2013
Posted by Stan Collender

August actually is a pretty good time to be in Washington.

Yes, the weather usually is awful. But with Congress gone, getting to work isn't as stressful because there's less demand on roads and public transit. You can get up later and still get to work on time.

And...of course...there's daily upbeat news from the Redskins' training camp.

I saw and felt all of this almost immediately on Friday when the House followed the Senate out of town for a five-week recess. Traffic was indeed lighter than usual, getting a table at my family's favorite local Italian bistro wasn't a problem and RGIII was interviewed on all of the local channels. Good times for sure.

But the usual sense of dramatically less stress that typically takes place at the same time didn't happen. Instead of talking about vacation plans, the standard topic of conversation all weekend was about what's going to happen when Congress comes back.

As a federal budget wonk, I was especially and repeatedly put on the spot by friends, reporters and clients about what's going to happen after Labor Day.

The basic answer is (1) I don't know, and (2) anyone who tells you he or she does isn't telling you the truth.

When it comes to the budget there's so left much to do, so many moving pieces and so little time that the overall situation -- let alone the fate of a particular bill -- is virtually impossible to predict with any degree of certainty.

And when you add the somehow-still-increasingly-intractable budget politics to the mix, the odds of being right about what's going to happen get even longer unless you're suggesting something close to fiscal chaos.

That's what I'm predicting: budget bedlam this fall and beyond.

Here are the key elements about what's ahead...or not ahead...on the budget when Congress returns to Washington in September.

1. Debt Ceiling. I'm listing this first only because it's not something that that has to be dealt with immediately. Yes, the debt ceiling will have to be raised at some point, but the latest word from the Treasury is that the "extraordinary measures" it can take to delay the day of reckoning will last into November. In other words, as much as the White House might like to get this out of the way, there's no rush.

That's not to say that Congress and the White House couldn't work something out on the debt ceiling in September. But the likelihood of them doing a deal before it's absolutely needed is as small as me not needing my air conditioner in Washington this month.

2. Government Shutdown. It's important to note that I'm not labeling this "fiscal 2014 appropriations." The truth is that none of the individual appropriations bills -- the legislation that supposed to be signed into law before the fiscal year begins -- have any real chance of being enacted by October 1. That means we're talking about a continuing resolution...or a shutdown.

I'm exceptionally hesitant to predict a shutdown. Although I was technically correct last year when the government did close for about 40 minutes, I obviously was also wrong that a longer shutdown was going to happen.

Still, concluding that a shutdown is more likely this year than it was last year actually is quite easy:

  • The tea party wing of the House GOP is being more adamant than ever about cutting spending and eliminating funding for the implementation of Obamacare.
  • House Speaker John Boehner (R-OH) is weaker and has even less control over his members than he had last fall.
  • The very large differences between House and Senate Republicans on budget and tax issues have only gotten larger.
  • House Democrats are more steadfast in opposing the GOP and not providing the votes needed to get something passed when the Republican majority can't do it on its own.

Then add three more things to all this already considerable disarray.

  • The White House is negotiating with Senate Republicans on a budget deal even though House Republicans are the Obama administration's biggest political problem.
  • Senate Minority Leader Mitch McConnell (R-KY) and Lindsay Graham (R-SC) are facing serious tea party primary challengers and, therefore, have far less room to maneuver on the budget.
  • In part because of the McConnell and Graham primary challenges, there is a growing possibility that Senate Republicans will filibuster Obama-nominated federal judges and others. That creates the continuing possibility that Senate Democrats will use the so-called nuclear option to prevent filibusters and that Senate Republicans will retaliate by bringing all other work in the Senate to a complete standstill is very real.

As a result, it's hard to come up with a scenario that makes even a short-term let alone a full-year budget agreement by October 1 a sure thing.

3. Sequester. Let me start by correcting a common misperception: If there is a sequester for fiscal 2014, it won't happen on October 1 or any time this fall.

Sequestration takes place 15 days after the end of the session of Congress. Technically that could be any time, but Congress almost certainly won't be able to adjourn until the next session begins because Senate Republicans will want to prevent the president from making recess appointments during adjournment. That makes mid-January the most likely time for a sequester to occur.

But the fact that it might not happen until next year won't keep the sequester from having an impact on the budget debate this fall. Some House Republicans are insisting that the spending in the fiscal 2014 appropriations be at the sequester level. But, as was obvious this past week when the Transportation/Housing and Urban Development appropriation was pulled from the agenda because its spending levels were both too high for some Republicans and too low for others, there's no agreement about that.

That means that, at the very least, the possibility of the across-the-board reductions that could happen in January will have an impact on every budget negotiation. For many, the sequester spending levels will be the default position and the minimum they will accept.

4. The Grand Bargain. Can we all please stop talking about a grand budget bargain this fall as if it is anything but a fantasy? If by "grand bargain" we're talking about tax reform that increases revenues, and Social Security and Medicare spending reductions in exchange for stopping sequesters, there's no way -- repeat, no way -- that it happens this fall, this year, or before the next election a year from this November.

Even a mini-bargain like the one the White House supposedly is trying to put together with some GOP senators won't fly in the House of Representatives. Here's a secret: it's not likely to fly in the Senate either.

5. Tax Reform. See #4 above.

I'm expecting the federal budget bedlam to last through the fall and into next winter.

A short-term continuing resolution negotiated very close to October 1 that lasts until the middle of November, that is, until the extraordinary measures run out, is the most likely tactic, and even that's only got about a 60 percent chance of happening.

It may well be that Boehner needs to show his tea partiers that he is willing to shut the government for them, and the tea partiers may need to show their voters that they were willing to let it happen.

That first short-term CR then most likely will be followed by a combination second continuing resolution and debt ceiling extension that lasts until the middle of January so that all three fiscal deadlines -- government funding, debt limit and sequester -- come together in a new fiscal cliff (#cliffgate) that roils markets and politics yet again.

That's also about the time when the Obama fiscal 2015 budget is supposed to be submitted to Congress, but it almost certainly will be delayed, perhaps for months, because the fiscal 2014 decisions will not yet be final. That will extend the budget bedlam through most of next year.

In other words, if you follow the federal budget for any reason, enjoy this August. The weather may be bad, but the Redskins are undefeated, traffic is light and you can grab an extra hour or so of sleep. Those may be the best things that happen to you for quite some time.

Helpful in understanding DC's Complexity

Thanks for this full analysis Stan -- for those of us who don't toil in the swamps of DC, this was very insightful and clarifying.

On a personal note, you were missed at Leen's Lodge this weekend


So the tea party types are

So the tea party types are controlling the congress despite being a tiny minority. Why does Bohner not allow cooperation and work with the Dems rather than bend to the nut case tea party? Seems to me that the R's are just shooting themselves (and the rest of us) in the foot.


I wish it were possible too,

I wish it were possible too, however, many "moderate" Republicans face stiff primary challenges from Tea Party runners. It will be impossible for them to be seen "compromising with the enemy." Be it Obama or Boehner.


Air conditioners in August

Stan Collender: "But the likelihood of them doing a [budget] deal before it's absolutely needed is as small as me not needing my air conditioner in Washington this month."

Turn off your air conditioner, Stan! Turn on your ceiling fans and open the windows instead!

It's wonderful weather in August in Washington!

At night it has been in the mid-sixties, and reaching only a balmy mid-eighties in the late afternoon. Turn off your air conditioner and enjoy Washington in August!


Washington temperature

Wallace Gordon Dickson may find it possible to "enjoy" temperatures such as he describes. I most certainly would be miserable, and I bet Stan Collender would too.

Like the editor of The Week, I'd give up my car (with difficulty) and my TV (without much difficulty) before I'd give up AC. Heck, I'd give up furniture before I'd give up AC.

https://mindfuldigressions.wordpress.com/2013/07/21/the-greatest-inventi...


Boehner and T's

I imagine that if Boehner allowed bills to be voted on without a majority of GOP votes, there would be a motion to choose another Speaker. Is this possible after the start of a new congress? My thinking is that the T's would threaten him with this possibility or just go through with it as quickly as possible.


Budget battles

Boehner has one other option,. He could take a page out of Frank Underwood's book and cut a deal with the Dems to vote for him in any speakership challenge from the T-Party loons.

It would be totally rational for the Dems to take that deal.

So the only thing that is need is for Boehner to act in the interests of the country, while still serving his own selfish interests, and for the Dems to be rational, rather than vindictive.

Anyone want to take a shot at the odds of that coincidentia oppositorum happening?


Boehner and the Democrats had

Boehner and the Democrats had that same option on the table during the fiscal cliff debate last winter, under nearly identical circumstances. It didn't happen then, and it seems pretty unlikely to happen to happen any time soon.

The political reality is if Boehner were ever to shatter the Tea Party rump off the Republican majority by relying on Democratic votes for leadership support, he'd leave himself completely at the mercy of the events to follow. If a full-blow leadership contest were to break out and split the Republican conference, could he really trust the Democrats to keep their word (I say that as a Democrat)? Wouldn't the Democrats jump at the chance to install a minority Speaker at the start of an election year, and force votes on immigration reform and all the other issues Republicans have bottled up?

To me, he has to keep forcing Republican majorities to support him (or avoiding votes where they won't support him) in order to ensure his own survival. And ensuring his own survival seems to be the one and only item on the Boehner agenda.


That can't work either

If Boehner cut such a deal with the Dems, he himself would lose to a Tea Party opponent in 2014. Imagine how he would be villified on Fox News.


Ugh

One thing that can be forecast about Congress is that it's abysmal poll numbers will continue to fall.

I wonder how long it will take for the US to split in two? Or to Balkanize entirely? I think I wouldn't mind living in Great Lakelandia or Laurentia. At least if Scott Walker, Rahm Emanuel and Rick Snyder were run out of their respective towns on a rail.


A modest proposal

Perhaps the states of the former Confederacy should be summarily expelled from the Union (with the proviso that they are not allowed to take any nuclear weapons).


Not a bad proposal actually.

Not a bad proposal actually. I would remove all military bases and charge fair market value for all infrastructure.


consequences

would be a fascist, apartheid state at our southern border, "liberating" territory throughout Latin America


Red State Refugee Considerations

I've been surviving in a crazily red state (Texas) for 35 years. I'm pretty sure the next logical step here, after all the anti-abortion laws recently enacted, is to just outlaw women altogether (cf Andy Borowitz). Will blue states extend resettlement guidance?


Re: Red State Refugee Considerations

Speaking on behalf of the great state of California, all your women are welcome here. Once you eliminate partisan gerrymandering sanity returns.


RE: Red State Refugee Considerations

Speaking on behalf of the great state of New York and its eponymous city, we will be happy to accept the women of Texas, and even the men who support their freedom, as long as y'all leave the guns at home.


Speaking for the great state

Speaking for the great state of Arkansas, we are still both the sanest and most self-sufficient state the South. Ladies, what will you have left to eat after the war? Forget these other two bozos. We have health exchanges AND guns. (Oh, and look, there's Bill!)


moving to a saner state

I might eventually take you up on that even though I'll always be from Texas. Though not while I have a job I like here.

I do love our friendly and generally courteous atmosphere (really), and a few other things, but there's a lot of downside. Not to mention the weather, which I have disliked from birth.


Thanks

Bad news but good analysis thanks - What a mess is our federal government - thanks


Why I love the Teabags

I applaud the Teabags for accelerating the demise of the Republican Party.

Let's hope they shut down the government, lose the House in 2014, and never have one drop of power ever again.


If Only It Were So

Thanks to gerrymandering Republican districts are safe. So whoever can win the primary (read: most conservative candidate) has a sure ticket to Congress. Depressing.


Breaking Gerry

See my post on Partisan Budget Cuts below.

Wanna break the gerrymandered districts? Stop their federal government support. Cut back Mail service. Defer farm subsidies. Close some wasteful outlying airports. Halt some infrastructure projects. Lay-off their Federal Government employees.

Then tell those constituents that your only doing their Republican Congressman's bidding. Less Gub'mint is good, right?


retribution

Absolutely. One reason unelected congressman (I sure don't get a chance to choose who to elect, so "unelected" is a fair description) from gerrymandered districts get away with it is that no legs are broken. The leaders who wring their hands and say they can't do anything about obstruction -- could if they put their minds to it.


Sequester Rules

One thing that would help enormously if another sequester goes into effect would be to remove the requirement that the cuts be taken across-the-board.

Is there any possibility this rule change could occur?


AFAIK, the very definition of

AFAIK, the very definition of a sequester is that the cuts go "across-the-board".

en.wikipedia.org/wiki/Budget_sequestration

So, no, it's not possible.


Hopefully, republicans will

Hopefully, republicans will bring America down.


They already have. Remember

They already have. Remember 2008?


Confederate Omniscience...

"The South Shall Rise Again!"

Lunatics in 1861, still at large in 2013.


You can write that again.

You can write that again.


Budget Bedlam

May we call them: The Tea-Party Taliban? They have strapped on their suicide vests and are willing to take all of us down with them.


I heard a federal employee

I heard a federal employee say.
"If I don't do my job, I can get fired. But if Congress doesn't do their job to pass a budget? Why can't we fire them? Make it automatic that they lose their jobs if the government shuts down? "


Use available parliamentary techniques

Assuming there is a rational majority in Congress, it can avoid blockage with parliamentary techniques. In the House it could use a discharge petition to get these things to a vote. It would have to be a vote on a Democratic bill, since Republicans obviously can't come up with anything realistic. Presumably there would be a super-caucus of Democrats with the sane minority of Republicans. In the Senate the filibuster would have to be jettisoned - or at least the current cloture structure. This is apparently not far from happening anyway.

Congress would be different after these things are used and presumably more responsive to the current national political preference, whichever way it goes. But ultimately minorities in the House and Senate are not guaranteed to always get their way.


Partisan Budget cuts

I hope the R's Sequester/fail to raise the debt ceiling/force government shutdown, AND the President recognizes that its the perfect opportunity to acquire temporary dictatorial power over the national purse.

President Obama can close government offices, lay-off federal employees, stop Federal government services, and suspend federal payments to RED States in the interim.

And when Tea Party Congressmen scream partisan bias, the White House can simply respond that the President gave Red States exactly the budget cuts they asked for. If constituents have a problem with that, they should take it up with their Congressional Representative.


Certainly a good idea, but

Certainly a good idea, but can be done in an easier way. All the president has to do is shut down Reagan National Airport ("sorry, can't staff it due to shutdown") and the whole thing would be resolved in a minute. No way any congressman or senator is going to slug it out to Dulles..


Shouldn't we change it back

Shouldn't we change it back to Washington National?
George was infinitely superior to Dutch.


That's true. The TSA/FAA

That's true. The TSA/FAA furloughs lasted about half a week earlier this year.


Next Sequester

As a federal employee, one thing I'd like to see is an avoidance of the "how can we make it work?" dance. Dammit, shut agencies down for a day every week. No mail on Mondays. No Social Security business on Tuesdays. No National Parks open on Fridays. Make people understand that the government is broken.


Article II, section 3

A quick read of this part of the Constitution shows how to do it: the president tells one or both Houses to stay in session, wherever he wants the to be, until the 'emergency' has passed. None of this August recess crap, or 3-day work weeks. The authors lnew this kind of thing could happen.
He can just dismiss them until they're ready to work, kind of a Congressional 'time-out'.

I can dream, can't I ?


Who's funding these crazy Tea Partiers?

Republicans can try to blame this crap on the Tea Party, but these clowns don't exist in a vacuum. Someone is giving them tons of money. Who is that?

Which nutcase billionaires and centimillionaires are getting just what they want? Gridlock, government failure and the ultimate destruction of democratic institutions that stood the test of time for centuries?

Do tell us.


Sequester question

Thanks for your analysis, Stan. On the sequester, aren't we facing the continuation of the current sequestration order? I was under the impression that the latest sequester was to continue until a budget (not a CR) was passed that met the requirements of 2011's Budget Control Act (1.2 trillion of deficit reduction over 10 years). Doesn't the BCA require the sequester to be in effect for every year until there is that 1.2 trillion reduction? Or is it the case that there's a new sequester order issued for each year that there is no sufficiently austere budget?

thanks,
Herman (BP)


New sequester every year

 Based on the approved spending levels relative to the caps for that year set in the BCA.


Thanks!

Thanks!


All these years the Repubs

All these years the Repubs pandered to the lobby for cheap agriculture. Now the bill is due and it is the browning of America. Thirty gerrymandering won't always save them, nor all these other antics.


waw

One thing that can be forecast about Congress is that it's abysmal poll numbers will continue to fall.

I wonder how long it will take for the US to split in two? Or to Balkanize entirely? I think I wouldn't mind living in Great Lakelandia or Laurentia. At least if Scott Walker, Rahm Emanuel and Rick Snyder were run out of their respective towns on a rail.
thanks for the info
mebel jepara


Not a bad proposal actually.

I would remove all military bases and charge fair market value for all infrastructure.


krn

May we call them: The Tea-Party Taliban? They have strapped on their suicide vests and are willing to take all of us down with them.




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