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OVERVIEW: A look back at the 111th Congress and what to expect in the 112th

- January 2011

The Obama Administration and Democratic allies in Congress assumed power in January 2009 after an historic presidential election and with almost unprecedented majorities in both houses of Congress – Republican Congressional losses in 2006 and 2008 had given the Democrats an almost-filibuster-proof majority in the Senate and the biggest majorities in the House in decades.

In January 2010, only a year later, they faced a focused, alarmed and increasingly anti-Washington public concerned about jobs and the economy and angry about the growth in government and skyrocketing spending and debt. The anger manifested itself in a new emerging Tea Party movement determined to change Washington, which allied itself with a united and resolute Republican Congressional minority which successfully blocked much of the liberal agenda the Majority seemed determined to push despite clear voter opposition. Also in January of 2010, public opposition to Washington’s activist agenda was symbolized by the astonishing special election of a Republican to the Massachusetts Senate seat held for half a century by a Kennedy.

Fast forward to January 2011, and the President will find himself making his State of the Union address in the House chamber facing a Republican Speaker of the House leading a solid House GOP Majority and a Senate GOP Minority Leader now armed with 47 Republican senators – more than enough to stop the President’s agenda in its tracks.

By the President’s own acknowledgement, he and his Democrat colleagues took a “shellacking” in the 2010 midterm elections.

(As an aside, the magnitude of Republican electoral gains – and Democrat losses – is easily understated. The GOP gained 6 seats in the U.S. Senate, and picked up 63 seats in the House, the largest switch of House seats since 1938. With 242 seats, the GOP now has their largest majority – and the Democrats hold fewer than 200 seats for the first time – since 1947. But the electoral wave in the states will have more long-term consequences than even those historically significant changes in the U.S. Congress. The GOP gained an astonishing 680+ seats in state legislatures, giving them control of at least 55 state legislative chambers and 29 governorships. With the newly-released Census data suggesting a population gain in GOP-leaning states and districts, redistricting and GOP control of so many legislatures and governors’ mansions paints a bleak picture for the Democrats.)

Despite the overwhelming GOP gains, debate continues today among political pundits about what happened last year. Democrats argue that theirs was a failure of communication – that they failed to effectively explain and market their agenda to under-informed voters who would actually support the policies if they better understood them. Republicans and their allies argue that it wasn’t the message or the messengers that the voters rejected, it was the policies themselves; that the voters shouted “STOP” to bigger government and increasing spending, debt and deficits.

Looking back at the last Congress, it is indisputable that the President and Democrat Congressional Majority can tick off an impressive list of very significant accomplishments: the $787 billion stimulus bill, financial/banking reform, the take-over or restructuring of banks and auto manufacturers, all topped off of course with the historic health care reform bill – arguably the most massive expansion of government programs since the 1930’s. These are no small things, and they account for Representative Nancy Pelosi’s (D-CA) statement summing up her short 4-year tenure as Speaker of the House: “We came here to do a job, and we did the job.”

But Senate Republican Leader Mitch McConnell (R-KY) and House Speaker John Boehner (R-OH) – who as GOP Majority Leader in 2007 handed the Speaker’s gavel to Cong. Pelosi and received it back from her this month – see those legislative and policy accomplishments very differently. To the Congressional Republicans, those are the precise policies that the voters rejected, that gave birth and voice to the Tea Party movement, and that returned the Republicans to power in the House and greatly increased their strength in the Senate.

After two years of conflict over the policies that the Democrats claim as accomplishments and the Republicans denounce as catastrophes – and, significantly, after the historic November elections – the President and Congressional Republicans finally found common ground in the December lame duck session. The President and Senate GOP Leader McConnell, one of the GOP’s top strategists, agreed to compromise legislation extending all of the set-to-expire Bush-era tax rate reductions and enacting a compromise “death tax” proposal (the tax bill is covered separately in these reports). The GOP gave some ground, agreeing to a shorter-than-desired 2-year extension of the reduced rates; but the concessions from the President were far greater, as he agreed to extend rate reductions for all taxpayers despite his consistent call for taxes to rise on upper income earners. That major tax bill was passed despite Speaker Pelosi’s early objections and strident opposition from the President’s liberal base, but with significant support from moderate Congressional Democrats.

Similarly, repeal of the Don’t Ask Don’t Tell policy with respect to gays in the military and ratification of the START treaty with Russia – both long opposed by the Republican leadership – were passed only when key GOP senators crossed party lines to support them.

While those are notable accomplishments, a number of other major liberal policy initiatives died a final death for the year in the lame duck session. The immigration reform “DREAM Act”, a police and firefighters collective bargaining bill and the so-called “Pay Equity” bills were all defeated by GOP Senate filibusters, and other legislation on the Democrat wish list (i.e., energy legislation, cap and trade) was not even called up for votes in the face of unified GOP opposition.

… and what to expect in the 112th [added January 2011]

So what lies ahead as the now-divided government takes power in 2011? Are we headed for two years of Clinton-like government with both sides seeking common ground in order to “get things done” . . . or two years of gridlock?

There are no crystal balls that answer that question clearly. And there are differing opinions on what course would be best for the country, and specifically for the struggling economy. Some economists make the case that a couple years of gridlock would provide some certainty and stability to a business community that has spent the last Congress bracing for the unknown with economic and tax policy used as political footballs in Washington.

What is certain is that the House can pass whatever legislation it wants to pass with the new and comfortable GOP majority.

Moreover, GOP proposals are likely to attract significant Democrat support if the opening day of the new Congress was any indication. In voting to elect the Speaker of the House, 19 House Democrats declined to vote for former Speaker Nancy Pelosi in her symbolic run against Speaker Boehner. That is the largest defection in support for a Party Leader since the 1920’s, and a sure sign of discontent inside the Democrat Party Caucus.

What is far less certain is what the Senate will do with any or all of the House-passed proposals. Moderate Democrat Senators facing re-election in 2012 – like their House counterparts – may well want the opportunity to vote on some House-passed reform measures, while Majority Leader Harry Reid’s (D-NV) liberal base will urge him to ignore House-passed reform measures and instead pursue their own “progressive” legislation – legislation which will almost certainly not be taken up or passed by the GOP-controlled House.

The complete unknown at this point is the posture of the White House. President Obama did help pass the tax extender legislation in December – despite outspoken opposition from his left wing base and occasionally sounding hostile to their criticism. And he said in his New Year’s Day radio address that he is “willing to work with anyone of either party who's got a good idea and the commitment to see it through." Republicans argue that they repeatedly tried to bring good ideas to the table throughout the last two years and were consistently ignored and shut out of the process. How and whether the President changes his modus operandi in the new Congress will be a critical factor in whether he and the new Congress work to reach consensus or work to set the stage for the 2012 elections.

Whether they choose accommodation or confrontation, the challenges facing the President and new Congress are daunting. Federal spending, deficits and debt are all reaching unsustainable levels, the new GOP Speaker and the veteran Senate Republican leader are both keenly aware of the high expectations of the voters that restored the GOP to power, and Tea Party backed candidates now serving in both houses of Congress are committed to changing business as usual in Washington.  

Budget, spending, fiscal policy . . . are real reforms in the forecast?

As a budget process primer: The President submits a budget proposal to Congress in February each year setting the Administration’s tax and spending priorities. Congress is not required to act on the President’s budget and rarely does so. Once the President’s Budget is submitted, House and Senate Budget Committees each begin consideration of their own budgets. Under statute, Congress is required to pass a Budget Conference report in the spring (it is not sent to the President for his signature). Once Congress has passed its Budget, the appropriations committees of the House and Senate are given their spending targets for the year and can begin consideration of the 13 separate spending bills that fund Federal departments and agencies.

One of the most dramatic “accomplishments” of the 111th Congress was their abject failure to meet any of their budget obligations. Neither house of Congress passed a Budget Resolution, the House Budget Committee didn’t even report out a budget, and not a single one of the 13 appropriations bills was sent to the President for his signature. As a result, Congress had to pass a series of “continuing resolutions” (CRs) to keep the government funded since the beginning of the new Fiscal Year on October 1st. The last such measure, passed in the lame duck session, funds the government only until March 4th.

The Republican leaders in both houses of Congress have promised to get their fiscal house in order, to return to a responsible budget and appropriations process, and to rein in runaway federal spending. These are daunting tasks under any circumstances, and the circumstances they face are not optimal – their ability to keep their promises will be tested very early. The March expiration of the current CR means the new GOP majority in the House and their Democrat counterparts in the Senate have to face the fiscal issues confronting the country almost immediately.

A likely conflict with the president over spending levels and priorities will confront them just as quickly. The President’s budget is expected to call for more spending than the new spending hawks in Congress will agree to, and his funding priorities are certain to be different from those of the new House GOP majority. This certain conflict is compounded by the call from House leaders for a new policy of “cut-go” – a proposed requirement that any new spending proposals be offset with spending cuts.

These certain policy differences come at a very challenging time as our country faces a fiscal crisis if we do not get our spending, debt and deficits under control. While the President and most members of Congress acknowledge the need to make tough choices and set priorities, whether they have the political will to do so remains to be seen.

Solving the Fiscal Year 2011 and 2012 spending issues is only the first step in much-needed spending reform – specifically reform of the out of control and unfunded entitlements and mandatory spending. Those programs, especially Social Security and Medicare, have long been the “third rail” of American politics: anyone suggesting that cuts be made to deal with the long-term insolvency of those programs was virtually certain to have a very short political career. It is still true that anyone proposing reform of those programs will be accused by some political leaders (and demagogues) of threatening the health and safety of America’s senior citizens.

But there are some courageous voices calling for structural reform of our government programs to address those issues. The new Chairman of the House Budget Committee, Congressman Paul Ryan (R-WI), is one of those voices. He has already put forth a program to tackle the more institutional fiscal crisis facing the country (as well as promising to return our annual discretionary spending to 2008 levels). It is not clear how much will be attempted, much less achieved, but the public awareness of the country’s fiscal situation, especially with Western European economies being bailed out to avoid default, may provide an opportunity and environment in which Congress can make the hard decisions necessary to get our fiscal house in order.