News The Caucus: Fight Over Spending Cuts a Prelude to Budget Battles Ahead

NYT > Home Page
HomePage
The Caucus: Fight Over Spending Cuts a Prelude to Budget Battles Ahead
Feb 27th 2013, 13:39

It may be hard to believe, given the intense partisan strafing already ignited by the automatic government spending cuts that begin on Friday, but this year's budget wars have yet to get fully under way.

In the next month, Democrats and Republicans, so at odds with one another that they are not even negotiating to avert the across-the-board cuts set to kick in at the end of the week, will have to find a way to agree on spending levels for the remainder of this year. If they fail, they could risk a government shutdown starting March 27, when the current authorization for spending runs out.

From the White House to Capitol Hill, no one claims to have any idea about how things will play out or particular confidence that a crisis can be averted.

As that drama unfolds, another argument will erupt, over a plan to be presented in mid-March by Representative Paul D. Ryan of Wisconsin, the Republican vice-presidential nominee last year, to balance the budget in 10 years through spending cuts far deeper than anything adopted so far.

Mr. Ryan's task will be made easier because his budget, which the House is likely to adopt largely unchanged as its tax and spending blueprint, will accept as a given the tax increases won by President Obama over Republican objections at the beginning of this year. But to give one indication of the kind of deep spending reductions necessary to achieve balance in a decade, last year's budget plan from Mr. Ryan did not eliminate the deficit until almost 2040.

March will also bring the belated unveiling of Mr. Obama's budget for next year, which will serve as a counterpoint to Mr. Ryan's proposal. To make things even more interesting, the two parties will also take up the first budget plan to be produced by Senate Democrats in four years, forcing vulnerable red-state Democrats into some tough votes.

Then, assuming no flowering of peace, love and understanding in the months following fiscal policy's March Madness, the White House and Congress could then find themselves in July back where they were two years earlier: deeply divided over both long- and short-term budget measures and confronting the need to raise the government's debt ceiling again amid calls from conservatives to use that leverage to further cut spending.

The succession of showdowns mirrors to a great degree those that played out tumultuously in 2011, leading to the ungainly compromise that produced this week's automatic spending cuts.

Two years ago, the unfolding conflicts were a test of the Tea Party movement's ability to drive the Republicans into a more aggressive posture on reducing the size and scope of government.

This time around they are a test of whether Mr. Obama's re-election shifted the political dynamic in Washington in a fundamental way.

Having prevailed in getting a tax hike in January, Mr. Obama is now trying to break a cycle in which conservatives regularly thwart his hopes of a legacy-enhancing bipartisan deal that would bring down the deficit through a combination of further tax increases and cuts to the entitlement programs. And he is still trying, with a notable lack of success so far, to return budget negotiations to a normal legislative process in Congress rather than lurching from one crisis-infused deadline to the next.

"The American public has been very clear that they do not want us to manage this country by crisis," said Senator Patty Murray, Democrat of Washington, the chairwoman of the Senate Budget Committee.

But for the next few weeks and months, brinkmanship could be more the rule than the exception.

At this point, the White House and both parties in Congress expect across-the-board cuts to domestic and military programs to take effect as scheduled on Friday and to remain in force for some relatively extended period.

House Republicans intend to move as early as next week to the next stage of the confrontation. They want to pass a continuing resolution to keep the government operating, probably through the end of the current fiscal year on Sept. 30.

The measure would authorize discretionary spending of $1.04 trillion – the legal cap for this year – with the understanding that the total would automatically be reduced by the amount of the automatic cuts for this year, effectively yielding a discretionary spending authorization of around $970 billion. House Republicans say the measure is clean and simple, and that if the Democratic-controlled Senate or the White House choose to reject it, then the responsibility for shutting down the government would fall to them.

Senate Democrats and White House officials declined to say exactly how they would respond, preferring to see how votes on a Senate Democratic alternative play out this week. Senate Democrats, saying they want to avoid indiscriminate spending cuts but still achieve the same amount of deficit reduction, have proposed swapping the cuts mandated by the sequester for a package of cuts to farm-subsidy programs and tax increases. That package has little chance of clearing the Senate.

Congress and the administration could have as little as three weeks to sort things out or risk a government shutdown. Congress is scheduled to leave town around March 22 for its spring break; in addition to resolving spending levels for this year, Congressional leaders are hoping to push budget plans for next year through the House and Senate before they leave town.

The experience of the past several years suggests that nothing will truly get settled in the next month. That would kick the big fights — over the composition of spending cuts, the willingness of Republicans to go along with Mr. Obama's demand for further tax increases and the prospects for a long-term deficit reduction deal — into the summer, when the federal government will again reach its legal borrowing limit.

Many analysts say the prospects for a comprehensive deal this summer are no better than they were in 2011, when talks between Mr. Obama and the House speaker, John A. Boehner, collapsed.

"I don't think there's a grand bargain out there – not this year, not next year, maybe not until after 2016," said Stan Collender, a veteran budget analyst.

If that pessimistic view proves correct, the two parties will have to fall back again on temporary measures and gimmicks to avert total fiscal gridlock and the risks of further economic and financial damage to the country – exactly the sequence of events that put them where they are today.


Follow Richard W. Stevenson on Twitter at @dickstevenson.

You are receiving this email because you subscribed to this feed at blogtrottr.com.

If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions

0 comments:

Post a Comment