The boy who cried shutdown

Kenneth Gold | July 27, 2015

Having failed to pass a single FY16 appropriations bill, and with 14 legislative days scheduled* before the end of the fiscal year, a consensus has emerged on the inevitability of yet another continuing resolution (CR) to avoid a government shutdown on October 1.  I think the odds do favor a CR over a shutdown, but just barely.  And I agree with those observers who are betting on one that lasts until the end of the calendar year.  I’m less optimistic on what’s likely to happen after that.

With Republicans holding majorities in both chambers in the 114th Congress, it was expected that they’d pass an FY16 congressional budget resolution, which they did on April 30, for the first time since 2010. Passing the budget resolution provided the appropriations committees with caps for defense and non-defense discretionary spending, which allowed the appropriations process to kick into gear.  You may recall that in 2013, failure to agree on the discretionary caps led to the 16-day October shutdown. This year, although they didn’t have as much of a head start on the appropriations bills as they did in 2014, when Ryan-Murray had already set the discretionary spending caps, there was some speculation that Congress would pass at least some of the less controversial bills before the end of the fiscal year.

Not surprisingly, a few things got in the way jelly cialis.  During debate on the Republican majority passed budget resolution two issues emerged. The first, on whether and how to use reconciliation, was more or less settled.  But the second, on whether to break the cap in order to increase defense spending continues to dominate the debate over the FY16 spending bills.  Republican defense hawks were willing to break the sequester adjusted BCA cap in order to increase the defense number above $523 billion, while Republican deficit hawks wanted to keep spending under the mandated ceiling.  That debate was settled by passing a budget resolution that stayed under the caps, but increased defense spending by adding some $88 billion in Overseas Contingency Operations (OCO) funds, which doesn’t count against the BCA caps.

Once that was settled, debate shifted to the more traditional division between guns versus guns and butter (it’s rarely, or never, guns versus butter).  Congressional Republicans want to increase defense spending, mostly at the expense of domestic spending; while the President and congressional Democrats want to increase defense and non-defense spending roughly equally, which is what the president’s budget seeks to do.

There was some optimism earlier on that some compromise might be reached similar to Ryan-Murray that would lift both defense and non-defense caps, especially given the better than expected improvement in the short-term deficit situation. In addition, the prospect that conservative Republicans would seek to use the debt limit issue as a bargaining chip dissipated when the need to increase the ceiling was pushed to the end of the calendar year.

On the surface, the fact that majorities on both sides want to increase spending would seem to provide the ingredients for a compromise.  The fiscal situation, at least in the short term, is significantly better than it was when Congress passed the Budget Control Act in 2011 that put the discretionary caps in place.  But the emergence of the most conservative wing of congressional Republicans, especially in the House, has changed the budget politics of the 114th Congress.

In these circumstances, a CR would satisfy only hardline fiscal hawks who oppose any form of spending increases.  But many of the fiscal hawks are also defense hawks, who may be willing to increase domestic spending, or agree to some mix of increased domestic spending and changes in mandatory spending in order to get defense increases.  And even if the big increase in OCO funding was somehow approved, and signed by the President, it’s only a short-term fix that doesn’t address their long-term goals in the defense budget.

A three-month CR, which most observers are now predicting, may be the worst alternative, other than a shutdown.  It would solve nothing, and relieve the pressure that seems to be needed to pass any deals, and allow opponents of a deal to use the debt ceiling increase to further block any progress toward compromise.

There are some reasons to be hopeful.  President Obama has been on a winning streak of late, and has accumulated some political capital. Speaker Boehner has had some apparent success in reining in his most conservative wing in the last month; and Majority Leader McConnell continues to want to demonstrate that Senate Republicans can govern effectively. A two-year agreement similar to Ryan-Murray that raised both defense and non-defense caps would for the most part satisfy all sides except the hardline deficit hawks, and push painful decisions past the 2016 elections.

So maybe the fact that there’s been no public mention of a budget deal doesn’t mean that there aren’t private discussions occurring at some level, or that a deal will be reached at the 59th minute. Especially given the improved deficit numbers over the last several months, perhaps conditions are in place for a Ryan-Murray 2.0, or even a grand bargain that includes tax and/or entitlement reform.

* The 14 days includes four Mondays and Fridays, when they are normally in pro forma session.

Ken Gold is director of the Government Affairs Institute

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Categories: 114th Congress, Budget and Appropriations, Updates