Budget Breakthrough? Or Government Shutdown!
Policy + Politics

Budget Breakthrough? Or Government Shutdown!

Reuters/iStockphoto/The Fiscal Times

President Obama and House Speaker John Boehner have ruled out the prospect of a government shutdown  later this month when the current spending authority lapses. But after all the budget falderal, could something as dramatic as agreeing on a continuing resolution be so easy?

Both the president and the speaker have strained their credibility on how much appetite exists for compromise.  And both are pretty good escape artists.

Boehner was the chief architect of a “Plan B” for escaping the fiscal cliff late last year that he was forced to withdraw amid bitter opposition from his own Republican members. Obama unequivocally declared during a presidential debate with Mitt Romney last fall that tough, automatic across-the-board cuts in defense known as sequestration were unthinkable and would never take effect. The unthinkable happened late Friday, and the first $85 billion installment of nearly $1 trillion of long-term cuts in defense and domestic programs began to take hold.

Now, in the latest chapter of Washington’s budget follies, the White House and congressional leaders have until March 27 to negotiate an extension of a stop-gap spending resolution that has enabled the government to operate without a permanent budget and appropriations bills—a standard policy for the last four years.

Approving that extension is essential to keeping the doors of government open. Boehner said in an interview with NBC’s “Meet the Press” over the weekend that he and President Obama were in agreement that “we should not have any talk of a government shutdown.”

“Congress ought to pass a CR without drama, as it has a half dozen times since April of 2011,” White House Press Secretary Jay Carney said Monday.

But brokering a bipartisan deal to extend the temporary spending authority through Sept. 30 – the end fiscal 2013–won’t be easy, especially when Democrats and Republicans both try to tinker with the continuing resolution to somehow blunt the blow of the sequester to their favored programs. 




The House Appropriations Committee unveiled its approach on Monday, reflecting the top priorities of the Republican majority. At the Pentagon, billions of dollars would be shifted to operation and maintenance accounts to relieve some of the crunch facing the four military services, according to Politico. At the State Department, $2 billion in new funding would be allowed for embassy security. And additional funds are allocated to help Homeland Security maintain customs and border patrol staffing.

Overall, the new continuing resolution would fund government agencies at an annual rate of $982 billion, down from the $1 trillion previously authorized before sequestration began to kick in last weekend.

“The legislation will avoid a government shutdown on March 27th, prioritize DOD and Veterans programs, and allow the Pentagon some leeway to do its best with the funding it has,” Appropriations Chairman Harold Rogers, R-Ky., said in a statement. “It is clear that this nation is facing some very hard choices, and it’s up to Congress to pave the way for our financial future.”

But the House proposal shut out White House efforts to boost spending for Head Start or obtain additional funds to help set up the state exchanges important to the president’s health reform initiative. And Sen. Barbara Mikulski of Maryland, the new chairwoman of the Senate Appropriations Committee, and other Democrats are certain to demand further adjustments before any measure becomes law.

“It seems to me we are playing a relatively high stakes game of poker here,” said Joseph J. Minarik, a former White House budget official during the Clinton administration and now senior vice president of the Committee for Economic Development. “If Republicans are not willing to give on some fronts, I don’t imagine the Democrats will want to give on others.”

“We might well wind up with a shutdown by the time we’re done,” Minarick added. “I don’t think that’s out of the question.”

Others argue that neither side has the stomach for a 1990’s style government shutdown, and that a compromise must be found.  “I’m reasonably sanguine that there’s not much of a danger of a government shutdown, but that’s not the same thing as saying things will come together smoothly,” said J.D. Foster., an economist with the conservative Heritage Foundation.

Plus, the continuing resolution is just one piece of the budget puzzle. Obama and Congress still need to reach agreement on raising the debt ceiling again by May 19 and approve a new budget for 2014, meaning that the debate about the government’s finances could swallow up much of the legislative calendar.

And even if lawmakers prevent a shutdown this month, the possibility of one cropping up later this year still remains. A wing of the House Republican caucus tried to block a debt ceiling increase in 2011—and political groups like the Club for Growth are encouraging them to use the issue again as leverage to force concessions from Obama.

The politics of the budget simply don’t align in a way to produce a deal, said Laura D’Andrea Tyson, an economist at the University of California-Berkley who has advised both Obama and Bill Clinton.

“Normal budget processes work when you don’t have the degree of political stalemate and ideological divide which we have right now,” Tyson said. “There is no incentive for individual legislators given the current political climate to compromise on the budget.”

There is also little sign that Democrats will back down on their demand for more revenues by removing loopholes from the existing tax code. The House Republican caucus has insisted that Obama already received his tax increases with the top-tier rate hike in the fiscal cliff deal. This never-ending battle could either paralyze the government or cause both sides to relent at some unseen point because of fatigue.

“Given the fiscal cliff and now the sequester, I suspect folks would for the most part like to find a way to get through this without too much pain and then focus on more of a regular orderly budget process and budget debate into the fall,” Foster of the Heritage Foundation said.  “Exhaustion may play a role in how this plays out.”