McConnell Sets a Budget Trap for the Dems

The Republican attempt to stop an omnibus appropriations bill has already begun.

Most analysts and senior staff on the Hill expected the Republican leadership in both Chambers to do all it could to prevent an omnibus appropriations bill for FY2011.  That battle has begun, as Senate Minority Leader Mitch McConnell has joined with House Leader John Boehner in opposition to an omnibus.

Let’s make a distinction here, with a big difference.

An Omnibus Appropriations bill incorporates the 12 individual appropriations bill for the upcoming fiscal year.  Each of those 12, however, are the result of negotiations among the appropriators and leadership.  That means that many of those 12 can be funded at higher spending levels than in the previous fiscal year.

A Continuing Resolution (CR) for Appropriations, by contrast, incorporates all 12 spending items, but caps appropriations for each and every one of them at “current levels.”  That means, if Republicans stick to their guns, that this year’s CR spending level will be frozen at last year’s levels, without incorporating last year’s stimulus spending.  Thus, if successful, Republicans will be able to start the 112^th Congress having already slightly reduced anticipated spending and having succeeded in, de facto, banning almost all earmarks.

If Republicans are able to succeed in capping new spending until February, a logical date for a new CR to expire, then House Republicans will be able to start on their announced agenda:  de-funding Obamacare, which requires substantial new monies; threatening the Environmental Protection Agency with reduced spending if the EPA begins to really crack down on CO2 emissions through regulation; and trying to eliminate duplicative programs.

One strategy, often whispered about these days, is to pass an Omnibus (in the House) and a CR (in the Senate), attach a large tax bill to the resulting conference report and get out of town.  Sounds easy, but that’s a heavy load.

For months, observers have wondered how anything other than the CR, something on taxes and the Medicare Docs’ Fix could ever emerge from this chaotic Lame Duck.

Wonder no longer—not much else of substance can pass—not New Start, not the Defense Authorization Bill, and possibly not even an extension of the 99 weeks of unemployment insurance that expires.

The 112^th Congress will be great entertainment, as Republicans set the spending and taxing agenda in the House, and the Democratic Senate leadership tries to herd  a very nervous 23 incumbents (who are up for re-election in 2012) along a path forged by the White House.

Thus, elections have consequences still.  Will the president challenge the new congressional order, or will he forge compromise on spending and taxes?  The consequences for his party’s prospects in 2012 remain enormous.