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Congress, Continuing Resolutions and Continuing Crisis

- April 2014

During budget talks in the summer of 2011, President Obama and Speaker Boehner began serious conversations to see if they could negotiate a “grand bargain” to deal with the country’s fiscal crisis. These were meaningful discussions of entitlement and tax reform – the first in many decades – and both the President and the Speaker were willing to discuss policy changes that their respective constituent groups would oppose: Medicare reform and revenue increases were both on the table.

Unfortunately, those negotiations fell apart with no “bargain” achieved. There are conflicting reports on why the negotiations collapsed, but the report most widely credited is that the President moved the goal post on taxes, demanding new revenue of $1.2 trillion, 50 percent more than the $800 billion that the Speaker had already agreed to. Whatever the reason, no serious discussions of the country’s fiscal crisis were to occur again.

The collapse of the Boehner-Obama talks led to the enactment that August of the Budget Control Act of 2011 (BCA). The BCA ultimately resulted in the imposition of the “sequester” – automatic across-the-board spending cuts that began in 2013.

In 2012 Congress again failed to pass a Budget Resolution or the individual appropriations bills that statute requires them to pass, instead again funding government through a series of last-minute Continuing Resolutions. But there was one notable accomplishment in 2012: Congressional Republicans refused to acquiesce to Democrat and White House demands that they set aside the across-the-board cuts in discretionary spending – the sequester – which were set to begin in 2013. The result was a real decrease in domestic discretionary spending.

Their track record in 2013 was not much better. Although each house of Congress did pass a budget resolution in April, the first in four years for the Senate, they passed not a single appropriations bill. Nor were there any negotiations on the bigger fiscal issues facing the country.

As the September 30th, 2013 end of the fiscal year neared, Congress was again faced with having to pass a “continuing resolution” (CR) to fund the government. Passing CRs had become standard practice in recent years, but last year Washington was a different place and standard practice was turned on its head.

The Congressional elections in 2012 had resulted in the addition to the GOP caucuses in the House and Senate a significant number of new “Tea Party” conservatives determined to oppose “business as usual” in Washington. These new and larger “Tea Party” conservative blocs in both the House and Senate demanded not only that the budget caps and sequester cuts enacted in 2011 be protected, as they had been previously, but also that Obamacare be defunded in the spending bill. And they said they were willing to shut the government down if their demand was not met.

The “defund Obamacare” mission was Quixotic and doomed to fail from the outset. Very little of Obamacare is controlled by the appropriations bills; most of its spending is in the mandatory, not the appropriated, spending accounts, and none of its tax increases could be repealed in a spending bill. Ironically, the Obamacare exchanges were on schedule to open the same day the government would shut down.

Nevertheless, enough House conservatives joined the “defund Obamacare” effort to deny Speaker Boehner the votes he needed to pass a continuing resolution to keep the government open. So, on October 1st the new fiscal year started with no government funding appropriated, and much of the government ground to a halt. In addition, on October 17th the U.S. would reach the limit on the amount of debt it could incur if Congress failed to extend the statutory debt limit.

As the shutdown dragged on and the debt limit deadline neared, the Republican “brand” took a beating in the polls as the Party was widely – predictably and correctly – blamed for the mess in Washington. Finally, the weekend before the debt ceiling would be reached, the White House and Senate came to agreement on a compromise, which then passed both houses of Congress, with House Democrats providing sufficient votes to make the Tea Party votes irrelevant. The bill was signed by the President only hours before midnight on October 16th.

The December compromise:

With the show-down over, the government re-opened, and Republicans beginning the process of restoring public confidence in their ability to govern, the House and Senate Budget Committees began negotiations on a budget blueprint for 2014. Their “Bipartisan Budget Act of 2013” called for more spending than the House or Senate Republicans wanted, but less than the Senate Democrats and White House were calling for. It did not raise taxes, a major win for the GOP, but accommodated Democrats by omitting entitlement reform. It increased defense spending to satisfy defense hawks, but did so by replacing some of the sequester automatic spending cuts, a move conservatives adamantly opposed. In other words, their proposal was a bipartisan compromise – rare in Washington today.

The December passage of the budget ended the fiscal showdown of 2013, but it was a short-term fix, and Congress would have to pass new funding measures by mid-January and another debt limit extension early in February. What was not known as Congress finally adjourned for the year was whether the “defund Obamacare” contingent in the House and Senate would force yet another showdown – and government shutdown – when the fiscal measures were again before the Congress in early 2014.

To the relief of a conflict-weary country, and House and Senate GOP leaders determined to repair their Party’s tarnished reputation, a spending bill passed both Houses of Congress and was signed by President Obama with virtually no controversy – or at least no controversy that made its way outside of the Capitol building. Although a couple of deadlines were missed and a couple of short-term continuing resolutions has to be passed to avert another crisis, an omnibus appropriations bill funding the government through the September 30th, 2014 end of the fiscal year was passed in mid-January.

House and Senate Leaders and appropriators are now moving forward with consideration of the individual appropriations bills which they have been unable to pass in recent years, hoping that “regular order” can be restored and that they can avoid another game of fiscal brinksmanship as the end of the fiscal year nears.

The debt limit extension was more complicated, and controversial. A number of House conservatives made it clear that they would not vote for an extension of the debt limit under any circumstances, while others insisted that legislation regarding military pensions be attached to the bill or they would also oppose it. The President demanded a “clean” debt limit with no other legislation attached to it, and House Democrats said they would not provide Speaker Boehner with any Democrat votes for anything but a clean bill.

Since the more conservative Republicans refused to vote for any debt limit extension, the Speaker did not have the necessary 218 GOP votes to pass a bill without Democrat votes. Once again, the more radicalized conservatives in his conference undermined the Speaker’s ability to negotiate with the Democrats, resulting in a policy outcome less conservative than what either they or the Speaker wanted. Without a united GOP Conference, Speaker Boehner had to have Democrat votes to pass the measure, and he therefore brought a clean debt limit bill to the House floor. That clean debt limit bill passed the House by a vote of 221-201, with only 28 Republicans voting for it, and was sent to the Senate for action.

A similar – if reversed – situation played out in the Senate, when radical conservative Senator Ted Cruz (R-TX) attempted to defeat the debt limit extension by filibustering the legislation, thus forcing Majority Leader Harry Reid (D-NV) to come up with 60 votes to move the bill forward. With only 55 Democrat Senators, Leader Reid could not pass the bill without GOP support. The Cruz filibuster forced Republican Leader Mitch McConnell (R-KY) and other GOP senators to support the debt limit extension in order to avert a possible credit default; votes that many of those GOP senators did not want to cast.

While their intra-party controversies left House and Senate Republicans divided and angry, the bill extending the debt limit through March 15th, 2015, was signed by President Obama, taking this contentious issue off the table until after the mid-term elections in November.