Given that Major League Baseball’s spring training has just begun and that everyone still thinks his or her team is going to win the World Series, the classic Brooklyn Dodger fans’ lamentation of “wait till next year” obviously is inappropriate when talking baseball.
But even though it’s only the beginning of March and the budget process is just getting under way, “wait till next year” has already become the phrase of choice among budget watchers (calling them “fans” somehow just seems wrong) who want everyone — including themselves — to believe that next year will be the one when it all comes together.
Unfortunately, it’s starting to look as if next year’s budget debate may not be any better either. That little will happen on the budget this year seems to be increasingly possible even at this very early date.
As probably was intended by the White House, the president’s budget proposal has already almost completely disappeared from view, even though it was released only three weeks ago.
Senate Majority Leader Harry Reid (D-Nev.) has already made it clear that he has no intention of having his chamber consider a fiscal 2013 budget resolution because, he said, the appropriations levels were set when the Budget Control Act was enacted last August. Even if Reid changes his mind, and although Senate Budget Chairman Kent Conrad (D-N.D.) seems determined to try to get a budget resolution approved, it’s unclear whether the votes exist in that committee to get one adopted.
Things aren’t much better in the House. Just last Thursday, Daniel Newhauser reported in Roll Call that because of deep divisions in the Republican caucus, it’s not at all certain that a budget resolution can be passed this year. The question may well be whether, after counting votes, the GOP leadership even tries.
Add to this that a continuing resolution is in place through Sept. 30, a debt ceiling increase isn’t likely to be needed before the elections, the Bush/Obama tax cuts don’t expire until Dec. 31 and no one is likely to force a showdown or threaten a government shutdown before the elections, and prospects for any action on the budget this year are very limited.
What no one is yet focusing on are the factors that will make a big decision on the budget next year less likely than many are presuming, hoping and praying.
The most important will be an economy that, if the current signs continue, will be in far better shape in 2013 than it has been during the past few years. That might make the 2014 budget debate the ideal time to start putting deficit reductions in place. But it also means that the political concern about the budget will be waning and, therefore, that the imperative to do anything big will decrease.
This is a poorly understood and underappreciated aspect of the federal budget debate. While it’s often talked about in pious tones with religious-like significance, the deficit typically is more a surrogate for other things — such as slow gross domestic product growth and high unemployment — than a separate issue. Scoring political points on the budget and getting credit for crafting or voting for a deal are almost always more difficult when the worry about those other things falls. That may be the case again next year.
The almost-certain smaller majorities in the House and Senate will also make a budget deal more difficult.
The majority party in each house will probably have fewer Members next year than it does this year. Not only will that translate into a more even ratio on committees and, therefore, make the already close-to-impossible fights to report out budget resolutions even tougher, it will also make it far more difficult to get a majority for anything having to do with revenues and spending in the full House and Senate.
The smaller majorities will mean that almost any group of Members will be in a position to make life more difficult on the budget for the leadership than has been the case the past few years. In fact, smaller majorities mean that a combination of even token opposition from the far right because spending is too high and revenues are not cut or opposition from the left because spending is being cut too much and revenues are not increased could doom any budget effort.
There’s also the strong possibility that the major changes in mandatory spending that, along with increased revenues, are often talked about as what’s needed to get the deficit under control will be put on hold until a consensus develops around a tax reform plan. It is increasingly admitted that tax reform will be a multiyear effort and that nothing concrete will emerge in 2013.
There are also factors that could make the deficit outlook worse rather than better. For example, the interest rates the federal government pays could be rising next year as the economy improves, the situation in Europe might still be unsettled and the tax cut decision that has to be made at the end of 2012 might reduce revenues below the baseline. It’s also possible that some new overseas situation will increase military spending above current expectations.
That’s why those who are putting their hopes for major progress on the budget in 2013 could find themselves doing the fiscal equivalent of sitting in the bleachers watching the Dodgers play at Ebbets Field with their heads in their hands.
Stan Collender is a partner at Qorvis Communications and founder of the blog Capital Gains and Games. He is also the author of “The Guide to the Federal Budget.”
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