An 11th Hour Budget (Literally)

With a strange lack of irony, the Washington Post headline yesterday read “Budget deal averts shutdown at 11th hour.” The irony is that the budget deal was literally worked-out at about the 11th hour, with the continuing resolution funding our Federal Government scheduled to run-out at 12:00 am midnight at the start of Saturday, April 9th.

In my previous post I remarked in passing on my own uncertainty over whether this government shutdown was happening.  That frank uncertainty having been established, I did expect the government shutdown to happen.  (I feel vindicated, however, by the apparent fact that principal Democratic and Republican budget negotiators themselves had no idea and little confidence whether a government shutdown due to lapsed funds could be avoided.)  In any case, there is now an agreement for about $37.8 billion in cuts to domestic discretionary spending in the Federal budget.  At the moment, the Federal Government is being funded by yet-another temporary continuing resolution–the 7th since the 2011 fiscal year began on October 1st–through Thursday, by which time this year’s budget will be signed.  Then…well, the fights on raising the Federal debt limit and Paul Ryan’s radical plans for the 2012 Federal budget can take center-stage.

Of course, $37.8 billion is more than halfway to the $60+ billion the Republicans have proposed cutting, but even in the Democrat-controlled Senate the vote was 56 against the House’s FY 2011 budget proposal and 58 against the President’s FY 2011 budget proposal. So, the Senate’s resolution point lay somewhere between the 2 to begin with.  Some spending cuts were going to happen–regardless of the impact of fiscal austerity on a sluggish economy–and the “winner” of an agreement can’t quite be judged by which side of the median point the final budget cut comes in on.  The Democratic-controlled Senate can vote-down most Republican spending plans, and President Obama’s veto is almost certain to be sustained in a split Congress.  But any new budget still has to come out of the Republican House.

So, where to weigh-in on the ongoing debate over the “winner” of the 2011 budget staring match?  The Liberal Ironist thinks that President Obama achieved a victory here for demonstrating that, unlike with President Clinton and Speaker Gingrich in 1995-1996, he and Speaker Boehner have the means to maintain a good working relationship and credibly negotiate with each other at a politically-charged moment.  But this is a win for Boehner on the same account–and he is a bigger winner coming out of this deal for 2 other reasons.

The first thing I found interesting about this budget deal is that the House Republican leadership moved their caucus (which is now well-known to be to the right of them) to the scope of the budget deal they made with the President almost 2 months ago to the day–for $38 billion.  (Again, the fact of budget cuts in the midst of a recession reflects a general shift of political initiative from the Democrats to the Republicans, but that was inevitable after last November.)  Here’s what I consider to be the big news: The only factional shift on the budget negotiations over the past 2 months is that the Tea Partiers have embraced the Republican leadership’s original compromise.

There’s another news item that has been much-quoted but which I think deserves more attention in its own right.  In his public statement on adoption of the budget agreement with Speak Boehner and Senate Majority Leader Reid, President Obama actually hailed the unprecedented budget cuts in his speech last night.  (Paul Krugman ended up making much the same objection on his blog.) He could have made the case that such steep budget cuts are the last thing the government should do during a recession–and then criticize the Tea Party Caucus for needlessly holding up a final budget.  The President could have defended Keynesian economics, to which he is a (weak-kneed) subscriber; instead he implicitly conceded the premise (which I know he doesn’t believe) that deep spending cuts during a prolonged economic downtown marked by high unemployment and well-capitalized by risk-averse corporations can somehow contribute to economic growth.

The Liberal Ironist would have preferred the President reach a deal with House Republicans for a budget, and admit distress over the budget he was passing, that it was not possible to do more to protect the interests of the vulnerable in this age of unwarranted austerity, that budget cuts jeopardize the economic recovery.  Do you think that casting this budget agreement as one the President accepts under protest would undermine confidence in him?  Isn’t it rather the case that, by celebrating budget cuts he believes could be harmful in an effort to grab the center, President Obama has needlessly conceded the field of ideas he took to in his excellent 2011 State of the Union Address to the Republicans?


3 thoughts on “An 11th Hour Budget (Literally)

  1. Kukri

    Seems like many Tea Party people told Boehner, “we’ll compromise here, but on raising the debt ceiling in May, we ain’t budging.” May might a brutal month.

    1. liberalironist Post author

      It could be, but the fact is that if 1/8 of the Republicans in Boehner’s caucus (meaning about 30) get cold feet, the debt limit can be increased. Furthermore, if for some reason Senate Republicans resist (as Minority Leader McConnell has claimed he would try to put riders on a resolution to raise the debt limit), the House can raise the debt limit through reconciliation, then requiring only a simple-majority vote in the Senate.

      I certainly don’t have a crystal ball into what the Tea Partiers are doing, but fighting the increase in the debt limit would be very foolish. They have already passed a budget and the House has lead agency to write the 2012 budget. Speaker Boehner has already promised that there would be no riders attached to the vote to raise the debt limit, so it isn’t clear what direct leverage they could get in the vote. Meanwhile, failure to pass an increase in the debt limit can mean a government shutdown (which in this case would make the Republicans look bad, period) and even a default on our sovereign debt. Even the pro-balanced budget Concord Coalition’s website contains a warning not to hold up the increase in the debt limit (

      “Raising the debt limit is a decision to pay the bills and is necessary to maintain the full faith and credit of the United States government. Failure to approve an increase would have dire consequences for government finances and financial markets. Political leaders should rise above partisan gamesmanship and increase the debt limit to avoid a damaging and unnecessary debt crisis. If members of Congress find it embarrassing or distasteful to vote on a debt limit increase, the remedy is to enact more responsible fiscal policies. Rather than risking default by opposing a debt limit increase, policymakers should use the need for action on the debt limit as an opportunity to develop a specific and realistic plan to put the country on a sustainable fiscal path. For example, they could consider spending caps or the other recommendations that fiscal commissions have made.”

  2. Pingback: We Have a Budget…and *Maybe* Even a Political Center | The Liberal Ironist

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