Budget Talks: ‘Perils of Pauline’ or ‘Hangover Part II’?
The 2012 budget debate in Washington is going to be vastly different from the one that took place in 2011.
This doesn’t mean the long-term deficit is no longer an issue. It also doesn’t mean there won’t be the usual noise when it comes to spending and revenues. Multiple rounds of finger pointing, recriminations and constantly repeated nonsensical statements should be expected.
There also will be the standard complaints that no one outside the Beltway will really care about regarding missed deadlines and the need to use some vote to send a message to (choose all that apply) the American people, Wall Street, the House, the Senate, the Democratic Party, the Republican Party, the leadership, etc.
And the phrase “dead on arrival” will be used so often this year that those involved in the budget debate will seem more like medical examiners than legislators with fiscal policy responsibilities.
But there will be one large difference between the 2012 and 2011 debates that will significantly reduce the drama involved with the budget: There will be far fewer “hostage-taking” opportunities.
Last year’s debate was a series of classic “Perils-of-Pauline”-like situations with a disaster repeatedly threatened because some part of the budget was tied to the tracks with the train barreling down. By contrast, this year is far more likely to be like a budget version of the “Hangover Part II” — a series of inane setups with an inconsequential outcome that is little more than a repeat of what came before.
Last year’s budget debate included the possibility of multiple government shutdowns because funding was approved only for short periods. Each new vote on a continuing resolution included the possibility that agencies would be forced to shut their doors in the not-too-distant future, and those threats created highly newsworthy minute-by-minute coverage of last-minute resolutions. That made the budget fights an issue all year.
The same was true of last year’s debate over the federal debt ceiling. Although it was discussed with increasingly harsh rhetoric from almost the start of 2011 (my first column on it was published
Jan. 11), it wasn’t resolved until an up-to-the-very-last-minute agreement was put in place that the word “default” stopped being used.
There was also the fight over extending the payroll tax cut. At different points in that debate, both chambers of Congress left Washington before the matter was resolved, and that happened only days before the lower rate was about to expire.
There was also the anything-but-super committee that kept the budget debate alive in the fall while it accomplished absolutely nothing. And the legislative leveraging actually began at the end of the previous year during the fight over extending the 2001 and 2003 tax cuts.
The situation will be vastly different this year.
There will be no possibility of a government shutdown until Oct. 1 because funding for all of fiscal 2012 has been enacted. It’s certainly possible there will be attempts to reduce appropriations as this year continues, but there will be nothing to take hostage because failing to do so won’t cause federal departments and agencies to turn off their lights.
It’s also not at all clear at this point how much of an opportunity there will be to do this on Oct. 1. That would be just five weeks before Election Day, and shutting down the government that close to when voters go to the polls might not be the best political strategy. It also would keep Representatives and Senators in Washington when they would much prefer to be home campaigning. That may especially be the case this year, given Congress’ incredibly low approval ratings and growing speculation about massive losses by incumbents.
The debt ceiling also won’t be an issue. Although there was some concern a few months ago that the increases in the amount the government may borrow allowed under the Budget Control Act — the deal agreed to in August — might not be enough to get past the election, those worries seem to have disappeared recently with the appearance of some hopeful signs that the economy is picking up.
And there will be no presidential or Congressional commission or super committee this year to stoke the budget fires.
That leaves the payroll tax rate extension that expires at the end of February as the only possible budget-related cliffhanger before the election. Given the political problems the extension created for House Republicans in December, it’s not even clear that will be much of a fight this time.
That’s not to say that there are no budget deadlines this year. In addition to the payroll tax cut extension at the start of 2013, the current debt ceiling may have to be increased before the end of this year, although not before the election. Some decision about the Bush-Obama tax cuts will have to be made before they expire at midnight on Dec. 31. And any effort to prevent, delay or mitigate the fiscal 2013 portion of the $1.2 trillion spending cut that was triggered when the hardly super committee failed effectively has to be enacted before it’s set to begin Jan. 2.
But all of that is most likely to happen in a lame-duck session next November and December. There will be few, and perhaps no, hostage-taking opportunities between now and then.
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.”