Unraveling Washington’s budget drama is a lot like peeling an
onion. That’s because Washington keeps adding layers to it. It’s
not about what’s happening next, it’s about everything happening at
once and seemingly, continuously. If you thought budget politics
confusing and confounding before, look at where things stand after
the Super Committee’s failure and the belated passage of the annual
funding bills.
The first layer of the budget onion is the just-completed
annual appropriations process. These programs are funded only for a
year at a time. Washington’s fiscal year begins on October 1, and
without legislation for new funding, the government shuts down.
Washington is supposed to enact on time twelve separate bills to
fund the government. Of course, it rarely does — only three had
been enacted before last Friday — so Washington
frequently sidesteps that deadline with its old standby the
“continuing resolution.”
Commonly known as a “CR,” this is stopgap funding allowing
negotiators to buy time to reach agreement on full year funding.
Washington has enacted several this year alone
— each time reaching the last minute of the last one before taking
the next step of enacting the next one.
Of course, the fight just over quickly will resume again
next year.
If all this deadline-defying sounds familiar, it should.
It’s the same fight that began the year. From there, it spilled
into the summer’s debt limit increase debate — which then spilled
into more CRs.
And all this stays resolved for barely the blink of an eye
The President’s next budget will come out early in 2012 and an
agreement on annual spending will again have to be reached by
October 1 — less than 10 months away.
There are now two important differences with past history
however. First, as with any fight — including fiscal ones — the
longer they go, the more acrimonious they get. So, expect the
rematches to get progressively tougher.
Second, the stakes are decidedly lower than with the debt
limit. An impasse on the debt limit threatened government default
this summer. Impasse on the annual spending legislation merely
threatens government shutdown.
While government shutdowns make great media theater, they
don’t threaten the government’s debt or the world’s economy. The
upshot is: If the parties would go to the precipice of default, how
much more likely would they be to go over the lower cliff of
shutdown in an election year?
The budget onion’s second layer results from this summer’s
debt limit deal. That deal lowered annual spending
totals by $917 billion over the next ten years — the same annual
spending over which Washington now is grappling for just a single
year.
It also created a special Congressional committee —
dubbed the “Super Committee” — comprised of 12 members from both
bodies and parties to come up with at least another $1.2 trillion
in deficit reduction over the next decade. The Super Committee was
supposed to reach agreement by November 23, and Congress pass it by
December 23, or face automatic spending cuts to a host of programs
in order to make up any shortfall.
With the Super Committee having been unable to achieve any
savings, we get the budget onion’s third layer: mitigating the
automatic cuts. Expect both parties to seek to undo those cuts
threatening their policy priorities — for Democrats, social
spending, and for Republicans, defense spending.
Because those automatic cuts won’t happen until 2013, that
gives the parties roughly a year to fight over undoing specific
ones. If it took Washington all summer to reach agreement to cut
spending by $917 billion in general, imagine how bitter the battle
will be over avoiding particular cuts?
The budget onion’s fourth layer is the presidential
election. Well less than a year away, the race is already a full
sprint. The election is more than just a distraction. The budget —
and more precisely, the deficit — is one of the race’s most
prominent issues.
No wonder. At its most basic, the budget is simply the
government’s priorities measured in money. Additionally, its
deficit is historically high. The result is that the budget has
become a political battlefield expressed in dollars. It is
impossible to campaign without taking stances on it. Those
positions limit what budget negotiators can pursue, if they want
Congress to pass it and Obama to sign it. And they are likely to
dictate at least the opening positions in subsequent negotiations
even after the next election.
These are the four layers of the budget onion… so far.
Already there’s talk of more, specifically: efforts to pursue broad
reforms to entitlements or taxes.
Washington’s budget process is overlaid with policy,
process, and political peril. Its overlapping layers further
complicate and extend an already difficult job — to
the extent it has become almost impossible and unending.
Washington is enmeshed in the budget for the foreseeable
future. The more it seeks solutions, the more it has to peel away…
yet the more it winds up layering on. And like peeling an onion,
the further you go, the more it makes you want to cry.
