Boehner's Budget Truce Averts Shutdown
Boehner's two-week spending bill may have avoided a shutdown for now, but the GOP's budget woes may just be beginning.
As Congress dithers on the federal budget, the states have taken the bull by the horns. Sometimes, as in the case of Wisconsin Gov. Scott, maybe too close to the horns.
Ironically, Wisconsin really does face a potential government shutdown; but the federal government doesn't because the House and Senate leadership, along with President Obama, have concocted a two-week extension of the Continuing Resolution (CR) for Fiscal Year 2011 that has passed the House and awaits a Senate vote this week.
In one case, with Wisconsin Governor Scott Walker, overreach has led to a decline in support for his position. Rather than take the givebacks that the public unions offered earlier in this chaos, Walker decided to take on the underlying proposition that these public unions should even exist. Like the Allied army at Arnhem, he may find that he has tried to reach a bridge too far.
In the other case, with House Republicans. underreach has led to an uneasy truce that will allow the government to operate for another two weeks and, we are told, save $4 billion in spending that would otherwise have occurred. I have written about the gimmicks in both presidential, Senate and House "cuts," so I won't belabor the point other than to say at some point that the eighty-seven new Republicans in the House will catch on to the act.
House Speaker John Boehner gained enough goodwill from his new caucus members by the open rule on the CR two weeks ago that, as we predicted, the House GOP went along with the two week extension. But the next bite at that apple might prove very sour for the House leadership if no long-term CR with big cuts emerges. This play is still in Act 1.
The game cannot continue much longer when seven months of the fiscal year have passed; agency heads will simply not be able to sustain the kinds of savings envisioned by House Republicans. At some point, the Congressional Budget Office will have to opine on the impact of $4 billion in "cuts" every two weeks on the federal workforce. Already, a couple of analysts have predicted somewhere between 600,000 and 700,000 jobs lost.
Use the whole salt shaker when analyzing these predictions. The assumptions underlying them are rarely fully revealed. How long a shutdown? Of what kind? Which personnel? They are all questions relevant to the answer. My own view is simple no federal personnel are going to lose their jobs and these estimates represent attack points for Democrats against Republicans.
One way to gauge how serious Congress is may be by comparing the crowds in Madison, Columbus, and Indianapolis protesting state government action, with the lack of any crowds, or even any perceived tension, among federal workers in Washington, D.C., or anywhere else in the nation. Most feds have been through this before and may well look at a shutdown as three or four days of paid leave.
Hovering over all of this is the looming debt ceiling increase vote set for spring or summer. I still forecast that the CR battle and the debt ceiling fight will merge in a couple of months. Since real structural restraint continues to seem very unlikely in the 112th Congress, the best that debt hawks can expect are some minor appropriations restraint and a large "process" reform that promises cuts in the future.
Meanwhile, more and more House Republicans will hear from their friends and neighbors as the non-security discretionary cuts begin to hit home -- cancer research, education assistance, infrastructure.
As I’ve noted before, the House GOP has taken the route of maximum political pain for minimal deficit restraint gain. It won't be fun to be in the House leadership when this becomes apparent to even the newest Members of Congress.
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