We know that when the chips were down, there was no bipartisan consensus on how to move forward with deficit reduction. While the the Simpson-Bowles plan needed just 14 votes to become a bipartisan recommendation, it mustered only 11 signatures. The signal this sent was that both sides of the political aisle may still be waiting for their respective side to win a decisive election victory, allowing them to operate at full political strength and push through no-compromise, winner-take-all solutions to the budget deficit and other problems.
Whether this happens before a crisis is uncertain, but the fact that Democrats were thought to be in this position of strength only a year ago and still struggled mightily to enact hallmark features of their agenda suggests that either side getting to this position doesn’t necessarily guarantee a running of the legislative table, and the costs may outweigh the benefits.
The bottom line on the budget, at least at this stage, is that it is difficult to conceive how a conservative GOP House and a Democratic Senate might arrive at a unified budget resolution and even harder to imagine the two reaching a budget-cutting reconciliation agreement, allowing Congress to tackle items such as Social Security, Medicare and Medicaid. Once tax increases and homeland security, defense and veterans spending are taken off the cutting board, we are down to about 14 percent of the budget that can be trimmed.
Safety Net & Environmental Issues
Of course, that doesn’t mean there won’t be attempts to cut the farm safety net over the next two years. Washington is not unaware that activity can often be confused with results. No doubt, reconciliation makes cuts a lot easier to pull off, but cuts without reconciliation are not impossible, though more difficult. In the final analysis, it may be that Congress and the president must rely on discretionary spending – that is, spending that relies on annual appropriations – to show their fiscal austerity.
On environmental issues, if a Demo-cratic Congress at full strength could not push through a legislative agenda, it’s hard to see how a divided Congress is any warmer to the cause. That means it’s up to the EPA and the White House to decide how hard they want to push an unpopular agenda viewed as threatening to a fragile economy. House Republicans will, no doubt, seek to unravel some of the regulations EPA has proposed or enacted, and there may even be an alliance among Republicans and conservative and moderate Democrats in the Senate to help see the effort through. The surest venues for success may be defunding provisions included in much larger spending bills that are hard to veto. Given the prospects for a bipartisan congressional rebuke and ongoing economic and electoral concerns, the administration pulling the plug or at least slow-walking regulatory efforts may be wise.
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