Only nine months removed from its most recent fire-and-brimstone budget fight, Congress is gearing up for another, which could prove to be the most apocalyptic to date.
The continuing resolution currently funding the federal government is set to expire at the end of September. If it is allowed to expire, Congress will enter a battle to adopt a new budget resolution before the federal government hits its borrowing limit (the debt ceiling), which is expected to happen in mid-October. If no deal is reached, the government could either shut down or default on its debts — two economically unpalatable options.
At this point, the federal government appears headed for its first shutdown in 17 years. On Wednesday, Speaker of the House John Boehner caved to pressure from conservatives in his party and included a measure to defund the controversial Affordable Care Act in its plan to keep the government open. Such a measure has no hope of passing the Senate, but its inclusion will make the forthcoming debate even more hostile and more time-consuming than usual.Â
With the decision to include yet another doomed crusade to defund Obamacare in the debate over funding the government, the House Republicans have made clear their commitment to hostage taking and scorched-earth politics over the nation’s fiscal well-being.
Consider that the Republicans have decided to raise the stakes in the budget debate even as the federal government’s budget deficit has shrunk dramatically. According to a report from the Congressional Budget Office, the deficit for the budget year ending on Sept. 30 will be about $642 billion — down from about $1 trillion last year. That’s about 4 percent of the nation’s gross domestic product; at the nadir of the recession in 2009, the federal budget deficit amounted to more than 10 percent of the nation’s GDP.
Next year, the federal deficit is expected to fall to about 2.1 percent of GDP, then tick up in the following years as more baby boomers tap into Social Security and Medicare.
As the Congressional Budget Office Director Douglas Elmendorf said earlier this week, the country has some “breathing room” in the short term to deal with its long-term fiscal problems.
The unfortunate part of the situation is that the House Republicans have some leverage here, and they could use this opportunity to pass a funding plan that includes long-term spending cuts.
Another report from the CBO released earlier this week warned that current spending cuts to the military and domestic spending — the products of sequestration — will not keep the deficit low in the long term and will continue to hurt the economy if they are not replaced. The Republicans have an opportunity to address the CBO’s concerns by replacing those dumb cuts with meaningful reforms to big entitlement programs.
That would be the smart move.
Instead, the party is catering to conservative ideologues that would rather sign a suicide pact to defund Obamacare than take a proactive step toward fixing the federal budget.
That is not to say that all Congressional Republicans are on board with this plan. In an interview Thursday, Republican Sen. John McCain said the House GOP’s plan is doomed to fail and is led by members of Congress who lack the experience and wisdom to recognize that shutting down the government is a bad idea.
The House Republicans should heed McCain and the CBO and devote their energies to negotiating a realistic deal to keep the government open.