StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



2012 budget

Posted by Stan Collender

This is my first Roll Call column since the Obama fiscal 2012 budget was released last Tuesday.  As the column shows, if you've focused on the small picture, as most have done since budget was sent to Congress, you missed the real story. The looming possibility of a government shutdown isn't the only way the debate that's happening this year is like what happened when Bill Clinton dueled with Newt Gingrich in 1995.  Just think about current OMB Director Jack Lew, who was deputy director of OMB in 1995 and the person who managed the shutdown for the White House, and current National Economic Council Director Gene Sperling, who was the deputy at the NEC dealing with the budget debate strategy, and ask yourself if focusing on what was propsed might be missing the budget forest for the trees.

1995 Federal Budget Debate Is Repeating Itself

Posted by Stan Collender

There are two reasons this story by Gail Chaddock from the Christian Science Monitor caught my eye.

First, Gail quotes me in it. Second, it shows that the new Republican communications strategy is to declare that they've already won this year's budget debate because the discussion, they say, is all about cutting spending. Here's the money quote (and it's not mine) from Gail's story:

This debate has completely changed,” said Senate Republican leader Mitch McConnell of Kentucky, in a floor speech on Tuesday. “Two years ago, the president and Democrats running Congress weren’t debating whether to cut spending. They were debating how much to spend…. Today, the only debate is how much to cut.”

Posted by Pete Davis
Congress will return on January 5th to battle over the budget for much of the year. The new House Republican majority (242R-193D) won't wait for the normal budget process to send the Senate weekly spending cuts, which the Senate won't take up. President Obama's State of the Union address (expected on January 25th) will be the next focal point, as will his FY12 Budget to be presented February 14th. The Budget Committees will produce resolutions that might pass their respective houses, but a compromise seems unlikely. The government is funded only through March 4th, so another continuing resolution will be required. The ultimate showdown will occur over extending the $14.294 trillion debt limit, probably by early March.
 
House Republicans will do away with the Gephardt rule that automatically passed a debt limit increase as part of the budget resolution. From now on, the House will have to explicitly vote on every debt limit increase. Since many Republicans and a few Democrats have long campaigned on never voting for a debt limit increase, passing one will be very difficult indeed. With the pre-Christmas $856 b.
Posted by Stan Collender

Those who think the Republicans in the House and Senate have several months to get organized are seriously misreading the political tea leaves. 

Even though the smaller Senate GOP minority and House Republican majority won't officially be in place until January, the leadership will be facing a very difficult decision over federal spending in less than a month when the the current continuing resolution -- which is funding all federal agencies and departments that operate with annual appropriations -- expires.

That's the first point at which the GOP will have to face up to one of its most prominent campaign pledges: To significantly cut federal spending.  The vote to extend the CR will be the first opportunity to face that challenge head on because it can be filibustered in the Senate.  The Republicans there -- (Actually, all you need is one: Can you say Jim DeMint?) are in a position to prevent the current CR from being extended if the new version doesn't reduce spending to the level they want.

It's certainly possible that the Senate GOP leadership will decide to punt in December.  They could

Posted by Stan Collender

Over at Political Wire, Taegan Goddard has this truly extraordinary...and scary as hell...quote from an interview with Minority Leader Mitch McConnell(KY) by National Journal.  NJ asked McConnell about his goal for Republicans retaking the Senate:

"The single most important thing we want to achieve is for President Obama to be a one-term president."

This is either one of the most off-message quotes in U.S. political history or one of the most important indications of what's really ahead over the next two years.  My guess is that it's the latter. McConnell is saying that it's not the economy, jobs, lowering the deficit, or any of the other issues on which the GOP has been campaigning: it's winning at the next election.  Admittedly I'm reading into this, but it seems as if McConnell is saying that if the GOP can prevent anything from being accomplished over the next two year, if he can keep economy in the doldrums, and if he can blame the White House for it all, he will have succeeded.



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