The Deal: Strike One

Posted By Elgin Hushbeck

As the dust settles form the last minute settlement to avoid a government shutdown, it is clear, at least to me, that Boehner came up short. From a campaign promise of $100 billion, House Republicans bargained themselves down to $61 billion, which was reduced even further in the negotiations with the Democrats to $38 billion.   As for the riders, Boehner did not get a single one.

The bottom line seems to be that Boehner simply was not going to let the government shutdown.   In the run up to last Friday’s deadline Democrats were eagerly looking forward to a shutdown, while Republicans grew increasingly fear full.   Both sides were looking back at the last shutdown, which, in the mythology of the beltway, has come to be seen as a disaster for the Republican, even though in the next election they held on to the house, losing only two seats.

Even going back to Reagan, Republicans have demonstrated a huge reluctance to shut down the government.   Reagan complained about the size of the budgets that Congress put before him, but in the end he signed them because he had to, for otherwise the government would shut down.

The Democrats play this game very well.  They know Republicans are likely to blink, and therefore they like large packages of bills.  The bigger the consequences of a shutdown, the better the Democrats like it.  Thus when Republican passed a bill to pay the military through the end of the year, Democrats refused to act on it.  They would rather risk troops in the field going without pay than put NPR or Planned Parenthood at risk.

Boehner, and some other Republicans, claim this is just a first step, and that the amounts of money being cut here, while historically significant, were minuscule when compared with the true scope of the problem.    In this they are correct, as $38 billion is only about 1 week’s borrowing. These House Republicans point to the bill on raising debt limit, and next year’s budget as better places to stand and fight, with somewhat vague assurances that they will.  Let’s hope so.

A congressman not happy with the deal,  John Campbell, being interviewed on Hugh Hewitt’s show last Friday stated that based on the testimony of economist the country has somewhere between 2-5 years, possibly even less, before the house of cards that is the federal deficit brings the economy crashing down.  A few worried investors are already beginning to get out of federal treasuries.

So for the three major chances to truly get the federal budget under control, the congressional Republicans have let the first opportunity go by them for a strike, refusing to even swing. They have two more opportunities.  Next up: the debt limit.

Apr 11th, 2011

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