4 Reasons We Haven’t Seen the Last of the Fiscal Cliff

No, our long national nightmare isn’t over yet

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AP Photo/J. Scott Applewhite

House Speaker John Boehner of Ohio vehemently rebukes conservative groups, Thursday, Dec. 12, 2013, during a news conference on Capitol Hill in Washington.

At the end of 2013, Washington seemed to have declared a truce. A rare bipartisan two-year budget compromise wound its way through both chambers. Suddenly the improbable seemed possible: No more government shutdowns! No more painful negotiations to slice more billions in spending! No more playing Russian roulette with the full faith and credit of the U.S. government! Wall Street rallied, believing the Tea Party wars that have ravaged Washington for the past three years to be finally done. Unfortunately, the reports of the death of the fiscal cliff have been somewhat exaggerated.

The fiscal cliff remains an important weapon that factions on both sides of the aisle have great interest in wielding, especially in an election year. Here are four reasons the fiscal cliff is far from over:

1. Obamacare. Democrats need to change the subject and the fiscal wars are a proven winner for them. After the government shutdown last year, pollsters were openly speculating the House might flip. Democrats enjoyed a seven-point lead in generic congressional race match ups. And then Obamacare hit and Dems are now down seven points in generic match ups and on their heels in the news cycle. While the budget is almost done*, avoiding another potential government shutdown, a fight still remains over raising the debt ceiling. President Obama has insisted several times that he won’t consider anything but a clean bill, whereas Republicans say passing a debt ceiling increase without at least some accompanying cuts through the House is impossible. Picking this fight and sticking to their guns has a lot of upside for Democrats: polls have repeatedly shown few Americans like it when Congress holds America’s credit rating hostage. The downside is, if there is a default and the fragile recovery tanks, Dems will be blamed nearly as much as Republicans. So, what’s most likely to ensue from now until March, when the Treasury is expected to reach the limit, is a game of brinksmanship with one side eventually capitulating at the last minute.

2. Outside groups. Democrats aren’t the only ones spoiling for another debt ceiling fight. House Speaker John Boehner last month lambasted outside conservative groups. “I think they’re pushing our members in places where they don’t want to be, and frankly, I just think that they’ve lost all credibility,” Boehner said at an end-of-the-year press conference. Groups like the Club for Growth, Americans for Prosperity and Tea Party coalitions have pushed for another round of fiscal chicken and have questioned the dire predictions of economic gloom should the U.S. government default on its debt. A handful of House conservatives have called on the leadership to not acquiesce to Obama’s demand for a clean bill, even if it means a default. House Budget Committee Chairman Paul Ryan even said in December that House Republicans would be looking at “what it is we can accomplish out of this debt-limit fight,” though he’s since retreated from those remarks and most House leaders have said they have no intention of defaulting on the nation’s debt. Still, Boehner is in the uncomfortable position of either finding 218 votes for a clean bill—which would most like have to be accomplished with Democratic help—or gamble that the White house will blink. In the first two rounds of budget cuts the White House did cave but the last two times they’ve held fast.

3. The budget. I put a * above when I said the budget deal is almost done. While the top line number has been passed through both chambers, deciding and voting on what actually gets funded comes with some risks. The devil is always in the details. Most House Republicans would like to see funding for Obamacare stripped out. Most Senate Democrats will not vote for bills that do not fund Obamacare. This could prove an insurmountable impasse when push comes to shove next week. And if that happens, the deal could fall apart and we could be looking at another government shutdown, though the odds of this happening are low.

4. The sequester. The two-year budget deal may have mitigated the effects of the sequester, which instituted automatic across-the-board cuts to the Pentagon and entitlement programs, but it lasts only two years and the sequester plays out over a decade. That means in two-year’s time Congress will be right back where they started: dealing with another potential government shutdown and crippling sequester cuts.

24 comments
PaulDirks
PaulDirks

Picking this fight and sticking to their guns has a lot of upside for Democrats: polls have repeatedly shown few Americans like it when Congress holds America’s credit rating hostage. The downside is, if there is a default and the fragile recovery tanks, Dems will be blamed nearly as much as Republicans.


JNS once again proves that she's trusting the wrong people. There is absolutely no evidence for the above assertion.



RobertNguyen
RobertNguyen

If they ever become our economic terrorists and demand ransom again, this time the American people will take stronger action and send them home for sure...

OzarkGranny
OzarkGranny

 Since Congress did away with earmarks, nothing gets done.  Nothing makes a representative or senator vote for something quicker then getting a bridge to nowhere.  Bring back the earmarks. 

Leftcoastrocky
Leftcoastrocky

four reasons: Teapublicans, Teapublicans, Teapublicans, Teapublicans,

jmac
jmac

"On Jan. 15 much of the government will again run out of money unless lawmakers can pass a $1 trillion spending measure that fleshes out the instructions in  the Ryan-Murray budget deal."    Republicans are saying they want to lie low so they don't make themselves the issue and can run against Obamacare in 2014.


Can they behave?  Ryan is out talking back to the Pope about his "trickle down" comment saying, "The guy is from Argentina, they haven't had real capitalism in Argentina."  November.   That's a long time for them to behave.  (and the pope is a 'guy')

DonQuixotic
DonQuixotic

The fiscal cliff should never be used as a political bludgeon, much like shutting down the government shouldn't be either.

Sue_N
Sue_N

The biggest reason we haven't seen the end of the fiscal cliff nightmare is the Tea Party. As long as the TP controls the GOP, the nutters will have control of the asylum. They don't believe a default would trigger a crisis, so they have nothing to lose.

Until the rest of the GOP comes to its senses and wrests control from the Tea Party, the hostage-taking will continue.

forgottenlord
forgottenlord

January will be a very interesting month and almost all the interest will fall on Boehner.  He alone gets to decide how painful or painless what happens next is.  And no matter which direction he goes, it has massive consequences for him and his party.

deconstructiva
deconstructiva

Thanks, Jay. I propose the other four reasons that the fiscal cliff is still a nightmare are:

1. The GOP.

2. The Tea Party.

3. John Boehner and Mitch McConnell.

4. All of the above.

Pardon my swampland cynicism (not at YOU, but at the R's), but they have created ALL of the fiscal drama, am I right? Name ANY major D's who have tried to hold the budget and debt ceiling hostage to promote their narrow agendas at everyone else's expense ...even their biz allies on Wall St. and the Fortune 500. I can't name any. The R's are the ones who keep us in peril - let alone refuse to do anything about eliminating long term unemployment, etc., but I digress - and they show little sign of changing. Vote em' out this fall.

roknsteve
roknsteve

Republicans like to drive off cliffs as much as normal people like to breathe.

Ohiolib
Ohiolib

@RobertNguyen You would think so, but many of these people are from districts so gerrymandered they effectively pick their own voters. 

jmac
jmac

@reallife  Under number one:  " if there is a default and the fragile recovery tanks, Dems will be blamed nearly as much as Republicans."


I'm willing to take that bet for a clean bill.  If there's a default, it's business that will decide who to punish - and even Cruz is afraid of the money lenders.   


ARTRaveler
ARTRaveler

@jmac Then I would expect Paul to push to eliminate all of those business tax exemptions and subsidies so we can have some "real" capitalism here also.

tom.litton
tom.litton

@DonQuixoticI don't agree.  If you can't agree on how much the government should spend and on what, not spending anything until you work it out makes sense.  Even though it's damaging.


However, the debt ceiling is just insane.  It should be eliminated. 

Diecash1
Diecash1

@Sue_N  "Until the rest of the GOP comes to its senses"


Comedy gold right there, Sue, comedy gold I tell ya.

Chosun1
Chosun1

@deconstructiva -- Pres. Obama wouldn't give an inch on Obamacare but then turned around and did what the Republicans proposed anyway through questionable use of executive waivers.  He showed a total lack of understanding of his own "signature law" and also kept the government shutdown unnecessarily.  If Obama had allowed the Republicans to delay Obamacare by a year, he could have avoided the rollout debacle and kept Republicans on their heals.  He totally misread the politics attached to his administration's incompetent healthcare policies and program rollout.

ARTRaveler
ARTRaveler

@roknsteve Please shut down the SS checks just prior to the 2014 elections so the voters can remember which Party and their Tea Party Representative screwed up their meals and doctor's visits.

forgottenlord
forgottenlord

@tom.litton

The House and Senate passed a budget, what, 8 months before the shutdown?  It was then supposed to go to conference.  The Senate appointed their representatives almost immediately, the House appointed them during the shutdown where they sat in a room taking a picture claiming the Democrats weren't there talking with them in one of the most infuriating photographs I've ever seen.

We can disagree on spending and have honest debates and honest votes and honest give and take and sacrificing projects in favor of others and honest deal making, but every time the Democrats even remotely try, the Republicans make them eat the piece the Dems offered and then take more.  John Boehner made a deal with Harry Reid that if the Senate passed the House budget, he would avoid a shutdown, they wouldn't defund ObamaCare, and they would get a debt ceiling increase.  Reid gave him that - even though it completely bypassed the budgetting process and ignored the entirety of the conference committee effectively working as a giant "I win" button for Boehner.  But that wasn't enough - the House passed a different budget, one that had a defunding of ObamaCare in it and sent it to the Senate and then blasted the Senate when the Senate rejected it and claimed the Senate shut down the government.

If 8 months of conference committees they couldn't agree on everything and the government shut down over it, I'd call them idiots and I'd shake my head but I wouldn't be yelling at the Tea Party for being hostage takers.  They didn't do that.  They stuck their heads in the sand for 8 months, put a gun to America's head, said "do what I say or else", and pulled the trigger when they didn't get what they wanted and blamed the Democrats for making them do it.

Sue_N
Sue_N

@tom.litton @DonQuixotic The time to figure out spending is before the bills are accumulated, not after. Refusing to raise the debt ceiling is just refusing to pay the bills you have already accrued. It has nothing to do with new spending.

jmac
jmac

@Chosun1 @deconstructiva "President Obama wouldn't give an inch on Obamacare . . ." 


THat's a big fat lie.   Republicans bragged in the mid-term about what they got in Obamacare.  It's a Republican/Romney/Nixon/Heritage Foundation health care plan.   Obama gave everything to the Republicans when he called in the guy  who wrote Romneycare to write Obamacare (he certainly didn't combine the Senate and House bills passed by Reid and Pelosi).    That's why his poll numbers are down - he's only down 4 points among Republicans - he's 15 points down among Democrats. 


It is a market-driven private insurance health care plan.  (Republican)  It is is no way a Democratic plan.  

ARTRaveler
ARTRaveler

@Chosun1 @deconstructiva It is an established fact that day #1 is day #1, no matter in which year it falls.


Why don't the Republicans who added over 200 sections to the Affordable Care Act work with the Democrats to make it better as it is a fully Republican idea, was the one that the Heritage Foundation (the asylum where Jim De Minted hangs out now) worked to create it for Massachusetts and whose president sat on the podium with Romney when it was introduced, and for which they haven't introduced an alternative in the past 60 years.

tom.litton
tom.litton

@forgottenlord@tom.littonOh i agree with this.  They weren't interested in passing a budget.  They were just showing off for their overly-conservative-thanks-to-gerrymandering constituents.


I was speaking hypothetically.