COMING SOON: The Fiscal Cliff To End All Fiscal Cliffs

President Donald Trump and the GOP Congress will have to avert a debt default and government shutdown — and that’s just for starters.

If President Donald Trump and the Republican Congress think they’ve been under pressure to produce lately, just wait a few months.

Over the next several months, Republicans will have to figure out how to cut deals with Democrats to avoid a default on the national debt and avert a government shutdown, among several other must-pass items. In any case, the negotiations will unfold against the acrimony of the GOP’s Obamacare repeal effort and a bruising fight over tax reform, none of which is likely to inspire trust between the two sides.

Though Congress avoided a government closure this month — a major bipartisan legislative accomplishment for an institution otherwise devoid of any this year — a quintet of critical deadlines in the early fall will force either a furious round of deal-making or brinkmanship that could have dire effects on the economy. It will be a major test of Trump and the all-GOP Congress’ ability to govern, who are bound to be blamed for any issues given their dominant political position.

By most accounts, Congress is not ready for the impending crunch; Trump even seemed to welcome a crisis with his tweet last week that the country “needs a good ‘shutdown’ in September.”

A new government funding bill is due by the end of September, and Republicans are behind schedule on producing a budget that lays out their spending plans. The debt ceiling will likely need to be raised around that time, a vital exercise that an all-GOP Washington hasn’t executed for more than a decade. Democrats are eager to extract leverage at every opportunity given their minority status. At least eight Democratic votes in the Senate will be needed to pass a funding bill and, most likely, increase the debt ceiling.

“If I were in charge, I would be worried,” warned Sen. Claire McCaskill (D-Mo.).

As if avoiding a government shutdown and debt default weren’t enough, Congress will have to tackle three important programs set to expire at the end of September: Federal Aviation Administration law, federal flood insurance and a children’s health insurance initiative. Congress may have to adopt short-term fixes to keep all three running. A number of smaller provisions are set to expire, too, including Coast Guard laws and some Medicare and Food and Drug Administration programs.

The early prognosis from senior Republicans is that the debt ceiling and government funding will have to be combined in some way to get a deal, possibly with some of the other expiring measures.

“Not many orphans get very far, do they?” said Sen. Richard Shelby (R-Ala.), a senior member of the Appropriations Committee.

Republicans are anxious about the nightmarish calendar ahead. Congress has 12 weeks left before all 12 appropriations bills are due, and not a single one is close to the starting — let alone the finish — line.

Work on the spending bills is on track to begin much later than expected, according to long-time appropriators and observers. Some lawmakers, like Rep. Tom Cole (R-Okla.) are already warning that a stopgap funding bill might be needed to avoid a shutdown after Sept. 30.

“Our budget process is totally broken,” said Sen. Bob Corker (R-Tenn.).

Republicans are now considering a longer delay to the official kick-off of the 2018 spending cycle. GOP budget-writers may not release their budget blueprint until after the Memorial Day recess, according to a GOP aide familiar with the process. The document sets the amount of money Congress will spend that year.

The initial goal was around May 15, the same week the Trump administration was expected to unveil its full budget blueprint. The White House has since told lawmakers to expect its budget the week of May 22, sources said. New administrations typically release their budgets in February.

Republicans can’t officially pass a budget until finishing, or ditching, their health care effort. That’s because their current power to use reconciliation — the majority-vote budget tool that allows the Senate to bypass the filibuster — will expire when a new budget is approved. Republicans intend to use the next budget to write reconciliation instructions for tax reform; Senate rules preclude using the next budget resolution for health care reform as well.

Still, some lawmakers say they can get around approving an official budget, and start drafting appropriations bills, if GOP leaders can informally agree to spending levels for next year.

In any case, Trump injects a new dose of uncertainty into the annual fall fiscal fights. The president nearly went all-out this spring to secure funding for his proposed US-Mexico border wall before relenting at the last minute; the White House could come to see September’s convergence of deadlines as a chance to exert more leverage over Congress.

“I don’t know where the president is on these matters. If he’s willing to go to the [mat] I think it will help Republicans,” said Senate Finance Chairman Orrin Hatch (R-Utah). “[Democrats] will do their very best to get whatever they can.”

Conservatives in the House Freedom Caucus, who mostly opposed last week’s spending bill, say they’ll also be digging in much more next year. And they expect Trump to do the same.

“It’s one thing to compromise and have a bipartisan bill, but when you have [Sen. Chuck] Schumer grinning from ear to ear, it’s like, ‘come on,’” said Rep. Dave Brat (R-Va.), referring to the perception that Democrats one-upped Republicans in the recent budget showdown. “Now it’s like, ‘OK, let’s get it right. Let’s start putting the Trump agenda into effect.’”

The focus on avoiding economic catastrophe could cause Congress to put off attempts to revamp expiring laws. Historically, Congress has had little problem punting on the FAA bill, while the flood insurance program is a source of Republican infighting, with lawmakers from low-lying areas fighting for lower premiums and fiscal conservatives blasting any rates viewed as too generous.

Democratic senators say they have not decided how to exert their leverage. They could insist on additional spending on domestic programs as a condition for voting to raise the debt ceiling. Democrats will also want an extension of the Children’s Health Insurance Program.

“I am concerned because we don’t see any long-term planning,” said Sen. Patty Murray (D-Wash.), the No. 3 Democratic leader. “There are some things…you have to do. And [children’s health insurance] is certainly part of that, in my mind.”

Republicans are skeptical that Democrats will provide votes without major concessions. And that means the GOP may be forced to come up with the bulk of the votes for lifting the debt ceiling, after providing minimal support over the past eight years.

Historically, “the party in the majority has to raise the debt ceiling. So we’re going to have to, I assume, combine that with other measures that will make that palatable,” said Senate Majority Whip John Cornyn (R-Texas).

Budget leaders are already scheming to get conservatives to swallow a tough vote after years of opposing increases to the debt limit. White House budget chief Mick Mulvaney is proposing that Republicans impose “more fiscal discipline” in future fiscal deals, while House conservatives have similarly hinted that they want some kind of deficit-slashing package to be included with a debt ceiling vote.

They could get their desire: This week, the GOP-led House Budget Committee privately floated cutting some entitlement programs later this year.

The crush of deadline-driven items — on top of big-ticket efforts on health care and taxes — is sowing doubts that Republicans can pull it all off. The party have likewise promised to raise Obama-era caps on defense spending.

“From the beginning, I thought the agenda was too big to be realistic,” said Doug Holtz-Eakin, president of American Action Forum and a former budget official in the George W. Bush administration. “It’s just too much.”

Source: http://www.politico.com

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