The 112th Congress will convene on Wednesday and, as the Washington Times observes, it won’t be long before the fireworks begin. In February, Congress will either pass a massive spending bill or see the federal government shut down. And in March, Congress will either raise the debt ceiling or see the government go into default.
Actually, it may not be quite as stark as that. Congress can perhaps buy time by passing temporary extensions of the budget and a higher debt ceiling. However, it seems clear that before long, the rubber is going to have to meet the road.
It doesn’t figure to be an easy convergence. In the House, Republicans are talking seriously about cutting discretionary domestic spending by $100 billion. It may be difficult for the Old Bulls and the new, more conservative members to agree on just where to cut. In any event, neither the Senate (with its 53 Democrats) nor the White House can be expected to like whatever budget emerges from the House.
As for the debt ceiling, many House Republicans will be loath to raise it. However, they will come under intense pressure to do so. For a default on the nation’s debt might well trigger a recession (both here and globally) or else lead to spending cuts too deep for either party to embrace.
Looking at these potential train wrecks – the budget and the debt limit – collectively, we can see the possibility of another grand bargain. In this scenario, the Democrats would accept significant spending cuts and in exchange the Republicans would keep the government afloat and grudgingly raise the debt limit.
However, such a deal won’t come easily. In one important respect, the Republicans will be in a stronger negotiating position than they were in December, now that they control the House. On the other hand, the Democrats knew in December that they would bear much of the blame if taxes went up in January. This time around, they may feel (rightly or wrongly) that a government shut-down would swing public opinion against the Republicans, as it did in 1995.
Thus, there is reason to believe that both parties will bargain harder than they did in December. And the harder the bargaining, the more prolonged the deadlock.
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