The Final Showdown? Why the Coming Budget Crisis May Be the Worst

With little time and less consensus, Congress may actually plunge into shutdown mode this time

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Larry Downing / Reuters

Speaker of the House John Boehner listens to U.S. President Barack Obama during a meeting with bipartisan congressional leaders in the Cabinet Room at the White House on Sept. 3, 2013

Over the past three years, America has been brought again and again to the brink of fiscal disaster by a dysfunctional Congress, only to have negotiators talk the sides down. This time, America’s luck may run out.

Congress returns this week to its long-running civil war over the budget. By Sept. 30, lawmakers must pass a stopgap bill to keep the government funded. And around Oct. 15, Congress faces a deadline to lift the limit on U.S. government borrowing. With just two weeks until a partial government shutdown, and a month until the U.S. loses the ability to pay its bills, Democrats and Republicans seem further apart than ever, and this time their leaders may be powerless to prevent catastrophe.

House Republicans made the first move on Wednesday morning, when Republican leaders yielded to the demands of their backbenchers by announcing they would vote Friday on a temporary funding bill that would defund President Obama’s health care law.

(MORE: Government Shutdown Looms, As House GOP Leaders Face Rebellion)

It’s not much of a plan. The White House and Senate Democrats have said repeatedly they won’t negotiate over Obama’s signature legislative accomplishment. Since the measure cannot get through the Democrat-controlled Senate, the decision will force the two chambers to volley proposals back and forth as time ticks away. “We’re going to have a fight,” predicts Steny Hoyer, the No. 2 House Democrat, who said the band of Republicans who shut down government in 1995 were “not nearly as radical” as factions in the current House GOP conference.

Those Republicans have taken Congress to the edge of a shutdown before. Since winning control of the House in 2010, Republicans have voted to stymie some or all of Obamacare more than 40 times. But they are desperate to finally do it before the bill’s insurance exchanges kick in on Oct. 1. Some 60 members signed on to a resolution, crafted by Georgia Representative Tom Graves, that would fund the government for the next fiscal year while delaying and defunding health reform until 2015.

The same cohort blocked a proposal by House majority leader Eric Cantor that would have provided temporary funding to government agencies but allowed the Democrat-controlled Senate to strip out an attached provision to defund Obamacare. When the Tea Partyers derided the gimmick, House Republican leaders were forced to cancel a scheduled vote on the plan, the latest in a series of rebukes to party leadership.

On Tuesday, members began getting word that House Speaker John Boehner would grant a vote on a bill that defunds Obamacare in a stopgap measure that funds the government at levels prescribed by sequestration, the across-the-board budget cuts that came into effect in fiscal year 2013. The move would be a victory for the Tea Party faction whose single-minded goal is cutting spending, no matter the political costs. “Our job is to reflect the people who sent us here. That means passing a good conservative bill out of the House,” said Congressman Mick Mulvaney, a South Carolina Republican. “We’ll worry about the Senate after the Senate actually does something.”

There is little question what the Senate will do. “We are not going to have them hold the [continuing resolution] or the debt ceiling hostage to Obamacare,” Senate Majority Leader Harry Reid told reporters on Tuesday, as he and other Democratic leaders have said for months. A group of Republican Senators, including potential presidential candidates Ted Cruz and Marco Rubio, has also been pushing the proposal to gut Obamacare. But even many conservatives say the goal is not only a fantasy but also kamikaze politics. “I want to defund Obamacare. I just don’t want to cut off Social Security checks and stop paying the military,” says GOP Senator Lindsey Graham. “But it’s up to the House. They’ve got to get 218 votes.”

Why would House Republicans pass a symbolic measure so late in the game? Democratic aides believe it may be the only thing that can get through at the moment. The defund provision buys Boehner breathing room with conservatives, passes the buck to firebrand Senators who have irked GOP leaders by touting an unachievable goal, and, perhaps, forces the Senate to share the blame in the event of a shutdown. House Democrats say they have barely spoken to their GOP counterparts as they wait for Boehner’s team to determine how to muddle forward.

(MORE: Treasury Secretary to Congress: U.S. to Hit Debt Ceiling in October)

Which is why it is hard to puzzle out an endgame. House Republicans frame the gambit as an opening offer that sets up a game of ping-pong proposals. “Assuming we don’t meet success there, I think we’re gravitating toward a Plan B, which is to connect a delay of Obamacare to the debt ceiling,” says Republican Congressman John Fleming of Louisiana. Like many House Republicans, Fleming believes GOP leaders have greater leverage if they dig in on the debt limit, despite the Treasury Department warnings that the economic consequences of default would be catastrophic. And like several dozen other conservatives, Fleming is willing to risk default if Obama won’t acquiesce to GOP demands.

And as House Republicans demand a heftier ransom than ever, Democrats seem less apt to cave than in the past. “Compromise does not mean doing it their way,” Hoyer said. Democrats are pushing to unwind sequestration cuts as part of the so-called continuing resolution that keeps Congress running in the absence of a functional appropriations process.

One way for Congress to compromise would be to pass a clean, temporary funding bill at currently prescribed levels that buys negotiators more time to work out a long-term plan. But Hoyer said he would vote against that. “I cannot remember a time,” Obama said this week, “when one faction of one party promises economic chaos if it can’t get 100% of what it wants.” House Republicans have been doing so for three years now. This may finally be the moment when a last-ditch compromise fails to materialize.

This story has been updated to reflect Republicans’ announcement of Friday’s vote.

 

150 comments
NormanRavitch
NormanRavitch

Too bad the Fugitive Slave Law is not around now.  We could use it to put all these crooked blacks politicians in jail, starting with obama.

RobertNguyen
RobertNguyen

The Republicans in Congress are totally out of their minds. They have impacted negatively so many Americans that even two generation Republicans like myself have been despising their tactics and strategy. This must be stopped and stopped now for the good of the nation. 

small_axe
small_axe

On October 1st, America will reaffirm it's membership among the first world nations by joining every other industrialized democracy on Earth with some sort of nationalized health care, public or private.

May all who will be helped by it, whatever their stripe, know that they live in a country where people can work together, and chip in together.

Cooperation is every bit as dynamic a force as competition.

marianolagdameo
marianolagdameo

Why is the "Dutch king stops welfare state" not a cnn news? Because it shows how inept this president is.

small_axe
small_axe

The GOP is deathly afraid of Obamacare, but not for the reason that their base thinks. They are deathly afraid because they know that they have been ling to their base for decades about this, and that once implemented, people will LOVE the ACA, dem and rep alike. When that happens, the balance of power shifts even further out of GOP hands and they are finished as a national party. They know it.

The GOP are like the four horses of the apocalypse. The ONLY danger here is that while the Dems try to hold firm, at the end of the day they are playing chicken with crazy people. And being rational, when catastrophe is staring them in the face there will be huge temptation to buckle and blink. God help us if they do. Whatever the cost, whatever the damage, the Dems have to hold firm and not not cave, not one single millimeter to the scm filth GOP.

The teaJadists are a plague, and ought to be treated as such.

BruceStrong
BruceStrong

Let's see if I've got this right... The Federal government is borrowing almost 0.8 Trillion a year to cover their additional spending. Now they just raised taxes on everyone in January and in March have to cut 85 Billion or around 4.5% of discretionary spending. So, they end up borrowing less to finance their deficit spending and this is somehow a problem for the economy, just don't get it...*&!!@###
Obama has stated that no deal will be made unless we INCREASE YOUR TAXES again, again and again...The Senate democrats have a plan, but it has no real spending CUTS only more taxes!!#$!!!^ Enough is enough on the FAIR SHARE Obama plan, cut Federal government spending NOW...

Sibir_Russia
Sibir_Russia

In the United States may "festival of disobedience" for the bandits. The FBI just goes on holiday.  


Reduction of expenses of the budget of USA can force the Federal Bureau of investigation to suspend its work during the fiscal year 2013/2014. According to sources, the Bloomberg Agency, the FBI evaluate all the options and continue to fight for funding” on the threshold of 1 October, when the United States will begin a new fiscal year and the effect of automatic spending cuts. In early September the post of Director of the FBI took James Comey. His predecessor Robert Mueller said the spending cuts will be one of the most complex problems, with which will face the new head of the FBI. James Comey said: "I was very surprised to learn about the impacts that sequestration is having on the FBI," Comey said. "Not only am I having to lose 3,000 positions, but there's a very real prospect, unless something is done, that I'm going to have to send home, for two weeks without pay, the good men and women who work in this building behind me."
http://www.huffingtonpost.com/2013/09/12/fbi-sequestration-impact-_n_3915781.html

reallife
reallife

sooooo... how are "things"?  i see a lot of nervous libs around here... LOL



lightdee
lightdee

This is the "line in the sand" people!  Americans are trying to buy affordable health insurance.  That is something which we simply cannot allow.

RickAllen
RickAllen

we have only ourselves to blame. the government by the people for the people is about to go bankrupt completely...

I say its about time...we need a new start...you cant spend your way on credit to prosperity...its economics 101. Every family knows this...now our government will too...

See you maybe on the other ugly side...

yv0007
yv0007

The GOP is running towards the precipice of history. That is simply harakiri to the party which was the hope of many Americans for generations. The extreme right is simply destroying Republicanism for ever. And the GOP won't have Democrats to blame this time.

ander6693
ander6693

America is going broke and could well collapse, although a slow decline is more likely. The reason the left and right is fighting so much now is because times are getting tough financially. Just like a marriage. And none of this is by accident. Both parties have destroyed this country's ability to generate wealth intentionally. NAFTA, GATT, Globalism. Jobs and wealth moved to Asia, we started printing money on credit. Welcome to the New World Order.

united_we_stand
united_we_stand

The Feds are saying to the people, look if you don't go along with Obamacare and our exponentially increasing deficit spending then we will shut down the government. Does this mean the IRS will stop collecting taxes? Does it mean we will disband the military? Does it mean Obama will have to fire some cooks and secret service? It is just an empty threat to the people. The Feds know many people are Fed up with them and are trying to rally people around them by threatening to cut whatever their polls show emotionally or otherwise effects Americans opinion. Don't let the Federal Government bully you into continuing the financial corruption. I would not care if they did not take 25% of my earnings, but since they do, their spending problem is mine too. The government either needs to provide us something we value, or proper representation, if they have the audacity to tax us this amount. They are taxing us just to pay interest to the private bankers who own them!

jmac
jmac

Coolidge (1920's) = Republican hero.   "He went on a budget and tax cutting spree.   His tax cuts to the top were designed to favor enterprise".    Cutting tax rate brings more revenue, so cutting tax cuts more brings more revenue, said Coolidge advisers.  (Shades of Rush Limbaugh!)    The market crashed in '29.  Coolidge was responsible for opposition to regulation that allowed Wall street and the banks to engage in rampant speculation and insider trading as he slashed taxes to boost Wall Street and six wealthy families played the greed-game.   "Coolidge is a bleak omen from the past"  --------  ----- He's a Republican hero.      

  Shades of Bush jr.   Cut taxes, cut taxes, cut taxes.   Ignore shadow banking, cut regulations, and let eight or nine banks play the greed=game.    Ayn Rand conservatives learned nothing from history.  Bush repeated Coolidge.   The Republican House is brain-dead.    Anyone who thinks Republicans are responsible on the economy ignore Reagan tripling the National Debt as Bush Jr doubled it.     Bush Senior lost his second term because he wanted to pay the bills.   Apparently, a sin in today's Republican party.  

elizabethkane6
elizabethkane6

With all the problems that this country is still facing once again the overpaid individuals we have sent to Washington are arguing the same ole lines if you don't do what we want then we will just take our marbles and go home. Grow up people you are dealing with peoples lives. Cutting SNAP benefits, threatening Social Security checks, ruining the credibility of the United States to pay our debts and for what so once again you can try to defund a healthcare policy which will provide coverage to millions and essentially lower costs guess what it hasn't happened the first 40 times you have tried now it just looks like a bunch of spoiled rich brats bullying the rest of the group. These are peoples basic needs we are talking about, some seniors and disabled folks depend on each penny of those checks to be able to eat, pay their housing, their utilities, etc they are not out on the town staying in 5 star hotels and eating on a lobbyists tab, wait maybe you should switch places and see how the other half lives and maybe you would finally get it .... nah you never will 

Realworldnonfantasyland
Realworldnonfantasyland

All that this headline says to me is Blah Blah Blah Blah Blah Blah Blah.  Wake me when the wolf actually snags the child

Galen
Galen

I hope the STUPIDS, shut-er-down!!!!!

How many favors can progressives ask for, and it keeps getting delivered !?!?

DeweySayenoff
DeweySayenoff

Here's my compromise: 

Remove the maximum income cap on social security and double the tax rate for anyone making over $250,000/year.  Use the extra funds to reduce or eliminate taxes on those making less than $250,000/year and put away some to pay for the health care of those who don't have insurance.

Then defund Obamacare.

Let's see how the GOP reacts to THAT.

The Republicans, by and large represent the very wealthy.  The Democrats, by and large represent the not so wealthy.  The former people don't rely on government for much of anything.  The latter do.

So when your pensions and social security and retirement and disability don't come through, when that money isn't spent and the economy contracts and unemployment goes back up, thank a Republican for it.  After all, their supporters won't suffer at all for it.  And there's nothing like a little extortion on the part of 40 delusional a**hats to hold a country of 313 million hostage to their delusional demands.

JaredHeath
JaredHeath

Shut it down for 2 weeks.  Especially the Social Security checks.  


We don't negotiate with terrorists.  And right now, the terrorists are House Republicans.

ZacPetit
ZacPetit

@BruceStrong Sure, let's enter your magical world where cutting government spending doesn't hurt the economy. Even in this mystical world of yours, the government has already spent the money for this year. The GOP, by holding the debt ceiling ransom, is threatening to drop obligations on things we have already bought.

If you're going to propose spending cuts, fine, but don't pretending that not paying for things you have already purchased is the same thing as cutting spending.

small_axe
small_axe

@yv0007 You're right. But my fear is that, being rational people, the Dems might cave in and blink at the last moment. God help us all if the dems blink and allow the tea party terrorists to succeed. We must be willing to pay any price to shut the TeaJadists down.

shepherdwong
shepherdwong

@yv0007"The extreme right is simply destroying Republicanism for ever."

Good riddance. Other than under Bush The First, their hasn't been a decent Republican Party since Eisenhower.

RealityIsNotOptional
RealityIsNotOptional

@ander6693 

That is the core problem...well put     Not sure it's like a marriage, more like a mafia in it's final days.

ARTRaveler
ARTRaveler

We seem to be creatinga lot of wealth for the top 0.001% at the expense of the rest of the country after giving them a much undeserved tax cut to screw up the country's finances.  While both parties have worked on creating the disparity, the financial condition bears a lot of the memories of the Cheney/Bush 2 presidency with off-budget wars and unneeded tax cuts in times of war.

ARTRaveler
ARTRaveler

You can make up all the stories you wish but that was a passed law and guess what, everyone never gets everything they want.  If the Idiot Party decides tio shut the government down, the first places should be ports and customs.  No imports or exports, e.g., how long before Walmart runs out since they basically ran all the manufacturing overseas.  No air travel.  Next, cut the power off to the facility that runs the Social Secuirity and Medicare programs (maybe do this first since it wilkl give the TPers everything they want-instant poverty!).

shepherdwong
shepherdwong

@united_we_stand"...if you don't go along with Obamacare and our exponentially increasing deficit spending..."

I always appreciate it when someone puts their gross ignorance on display right out of the box; so I can stop reading. Deficit spending is decreasing. You can look it up.

ARTRaveler
ARTRaveler

Trinkle down didn't work them and doesn't work now and believing that giving tax cuts to the super rich creates jobs is just GOTP fantasy.  They may have created jobs but they weren't in the US while we cut the ability of the government to maintain the infrastructure that allows them to do all their work in 3rd workld, low regulation, low regard for life countries and then bring them back to this country to sell ar massively higher prices.  I guess when the Walmart trucks start falling through bridges, they will have to tax the rest of us to maintain their incomes among the top 15 in the country (that is 6 of them in the top 15 in wealth).  Certainly hasn't helped the US as evidenced as the economy improves, they lose their customers to stores for those who want something above the bottom level of quality.

united_we_stand
united_we_stand

@jmac The depression happened because Wilson and the Democrats ushered in the Fed giving them a monopoly over the creation of currency letting them create money out of thin air backed by nothing. Democrats think they can regulate themselves out of this mess. They cannot. Its an old story, going bank centuries, of western kings and governments become enslaved by debt to crafty money lenders.

ARTRaveler
ARTRaveler

You wondered what happened to those 3rd grade bullies?  Well, they may have gotten older but they haven't grown up and now they are in the U S House.

PaulDirks
PaulDirks

@DeweySayenoffThe former people don't rely on government for much of anything.

Actually the wealthy rely on government far more than they let on. They just don't think they ought to have to pay for it.

Galen
Galen

@JaredHeath 

excellent!!

progressives love the doubling down on stupidity!

MaureenMcclement
MaureenMcclement

@small_axe @yv0007 look at all the money would could have saved if we didn't bail out the banks and mortgage corporations that stole our lively hoods in the process.  

jmac
jmac

@ARTRaveler  Bush doubled the National Debt as Cheney bragged  Reagan proved deficits don't matter.   Reagan tripled the National Debt fighting the 'cold war'.   Republicans have never been responsible on the economy and now they've trying to resurrect Coolidge and Ayn Rand.   Coolidge, Ayn Rand, REagan and Bush jr.   Some heroes.     

small_axe
small_axe

@shepherdwong @united_we_stand Not to mention that Obamacare is the law of the land, duly passed by both houses of congress, and signed by the president --  and has already been held up as constitutional by the most conservative supreme court in american history.


jmac
jmac

@united_we_stand @jmac    You can no longer make that argument after Bush.  It happened TWICE.  The same thing exactly twice.   Coolidge - "His actual recored shows that he was an extraordinarily blinkered and foolish and complacent leader, not less than George W. Bush before the stock market plummeted in 2008."    Bush's  job recored is abysmal.  His economic record is abysmal.   The only thing he repeated from Coolidge was the Stock Market and Wall Street running amok to take us under. 

"Democrats think they can regulate themselves out of this mess."  It was deregulation that caused this mess - again.   We repeated again.  And now we're going to repeat a whole lot sooner than 67 years.   

There's another right wing book coming out about Coolidge The Hero.   Send it to Glenn Beck.  He's on board.   Send it to the Wall Street Journal editorial board.  They love love love the running of the Bulls.  When it crashes - why, we'll bail them out.   No problem.  

We don't have to have debt.  We can pay our bills.  That's what taxes are for.  THat's not a dirty word.    You mentioned "crafty money leaders".  Yes, that's the problem.  They're not going to regulate themselves.  



united_we_stand
united_we_stand

@jmac I may not haved explained fully but this new monetary system allowed the creation of massive amounts of credit which funded the first ww and the roaring 20s. These bubbles are caused by the ability of private bankers to control the money supply. Controlling the amount of money allow one to control prices any bankers gain the most if they let them fluxuate the most, but that hurts also people the most (the gains are going to the top). 

shepherdwong
shepherdwong

@PaulDirks  They really do give new meaning to the term "Entitlement Spending," don't they?

fitty_three
fitty_three

@PaulDirks  

Their security footprint, their carbon footprint, their infrastructure footprint.

All dwarf the every day guy.

reallife
reallife

@ARTRaveler  electricity? I thought you guys were asking for solar energy - we conservatives already bought it - didnt want to wait forever until the feds gave it to us

get on with the times - this is the 21th century!

LOL

ARTRaveler
ARTRaveler

If you don't like paying taxes then keep your car off our highways!  Dependibng upon where you live, forget electricity.  If you have a fire, get a hose and look for a well so you don't have to use that "socialized" watyer system.  Damn this attitude just shows how dumb some people are.

RealityIsNotOptional
RealityIsNotOptional

@united_we_stand @jmac 

If it wasn't for Glass-Steagall and essentially bombing most manufacturing plants worldwide out of existence; we would have never got out of the depression.