Game On: Grand Bargain or Epic Fail?

Over the past eight months, the 113th Congress has managed to pass 15 bills, putting it on a pace to be the most unproductive Congress since the 1940s.

Hmm. So what can we expect when Congress returns from its six-week recess? Will our national leaders act responsibly? Or will they ignore the ”inconvenient” responsibilities of governing?

The list of unfinished business is pretty long and weighty: raising the debt ceiling, implementing the Affordable Care Act, immigration reform, Dodd-Frank, climate change, and tax and entitlement reform, including physician payment.

Oh, I almost forgot—and whether the government stays in business.

Actually, a few of those issues are intertwined—or at least they will be before it’s all said and done. Expect to see a double-dose of fiscal drama this fall because (1) Congress must act to continue government spending before the coffers run dry on September 30, and (2) the debt ceiling must be raised or the country could go into default.

Ordinarily, a government shutdown could be averted by simply passing a continuing resolution to provide stop-gap funding while Congress negotiates a compromise on the 12 federal appropriations bills. But even that may be difficult.

Recently, about sixty House Republicans wrote to House Speaker John Boehner (R-OH) and Majority Leader Eric Cantor (R-VA), urging them to use the continuing resolution to defund the Affordable Care Act. Unless that happens, they say they’re willing to risk a government shutdown.

Boehner, a veteran of the 1995 shutdown, knows full well the political risks involved. But he doesn’t have much time to turn the tide. The House returns from its summer recess September 9, just nine legislative days before the end of the fiscal year. So there’s not much time to avoid a fiscal (and political?) catastrophe.

The most likely scenario has lawmakers agreeing to a continuing resolution, probably until early to mid-December. House Republican leadership aides have privately told Democrats that they would be willing to pass a CR measure at $988 billion — a level slightly higher than some conservatives hoped for. But Democrats and many Republicans also say they want to replace the automatic spending cuts known as sequestration. House Republicans let it be known they are open to replacing those across-the-board cuts with more targeted budget-saving measures.

Which brings us to the debt ceiling.

Republican leadership has always branded the debt ceiling debate as a moment of leverage for their party. But while House Republicans want to exact some budgetary savings or reforms to existing entitlement programs, President Barack Obama and Democrats have said at every opportunity that they refuse to negotiate over lifting the debt limit.

Meanwhile, a handful of lawmakers have been meeting quietly with White House officials to talk about a way ahead, a grand bargain that includes a major reform of tax and entitlement programs. So far, both sides seem to agree on proposals to cut Social Security through chained CPI and to means test Medicare benefits for wealthy seniors.

But that’s a long way from anything resembling a grand bargain.

Dom Ruscio
Partner

Lisa Ellington

Big Thinkery, LLC, 1011 Kenilworth Court Northwest, Concord, NC, 28027