Budget

The electoral risk to politicians involved in passing a dog's breakfast of a "big, beautiful bill" – and there have been too many of this century to count – is often overstated. Once bills this large and unwieldy are passed there are a litany of problems that emerge as Americans, dulled into frustration by the same old swamp, discover only too late which specific policies negatively affect their lives and businesses. But then there are also things they like about it too, and even measures that are initially unpopular find purchase. And I do mean purchase in both senses, as in literally bribing voters with their own money, as Barack Obama's Medicaid expansion did.

After multiple rounds of negotiations to raise the debt ceiling with President Biden's team — not the president himself, of course, because he was busy eating his ice cream — the House Republican leadership announced an agreement in principle, subsequently putting up language up over Memorial Day Weekend for members to consider. There are hurdles to overcome, but based upon initial reactions, majorities of Republicans and Democrats are agreed on this deal, with opposition coming from fiscal conservatives and progressives: particularly environment-focused progressives angered by the inclusion of energy policy priorities for Republicans and for Senator Joe Manchin.

This week we heard a lot about AUKUS, a trilateral initiative between the United States, the United Kingdom and Australia that will revamp the Australian naval fleet with nuclear-powered submarines over the next two decades. President Biden, UK Prime Minister Rishi Sunak and Australian Prime Minister Anthony Albanese made a show of it in sunny San Diego on March 13, where they officially inaugurated the defense agreement and gave speeches about defending sea lanes and the rules-based international order in the Indo-Pacific. But there was another story here: the Pentagon released a torrent of charts and bureaucratic documents on what it would like to see in the coming year’s defense budget.

It’s almost spring, and you know what that means: buds popping on the trees, birds chirping as the days grow longer, and the president introducing a budget that will be quickly forgotten. And so it's happened. But there have been a few interesting twists that could make this budget season more interesting than most. President Biden wrote an op-ed for the Wednesday New York Times presenting his plan to “extend Medicare for another generation.” The piece was largely predictable: calls to raise taxes on the wealthy as a way “to increase the program’s solvency by twenty-five years.” While some fiscal conservatives welcomed the president’s willingness to raise the issue of Medicare solvency, his ideas are largely dead on arrival for Republicans.

Congressional Republicans are gearing up for their four millionth attempt to rein in government spending, and surely this time will be different. After years of posturing in favor of budget cuts that never seem to materialize, the national debt growing to 130 percent of GDP is finally a threshold they won't cross. A Fox News hit? By gum, there's no time! Republicans exclaim as they raise a quivering red pen to the latest defense authorization bill. This job is about policy, not going on TV, dammit! You'll forgive me if I sound a bit cynical. After all, Republicans controlled the elected government for two years under Donald Trump and the deficit only got bigger. Yet as another debt ceiling fight looms, this time the GOP sounds like they might be serious about shrinking the state.

Lame-duck sessions of Congress are rarely uneventful. Whether it’s cramming through spending at the last minute or cramming through even more spending at the last minute, our legislature can always be counted on to rubber-stamp bills that lacked political support before Mariah Carey returned to the airwaves. Leading the charge for the opposition this time around is the self-declared speaker of the House, Kevin McCarthy. A Bloomberg headline recently proclaimed that “McCarthy Draws Line on Spending,” and trumpets seemingly blared out from the heavens heralding that Republicans had — finally — rediscovered their fiscally conservative bona fides. But not so fast: this is a script we’ve seen before.

Senate Majority Leader Chuck Schumer knows how to fix inflation: higher taxes. “If you want to get rid of inflation, the only way to do it is to undo a lot of the Trump tax cuts and raise rates,” surmised the New York Democrat to reporters on Tuesday, after meeting with West Virginia Senator Joe Manchin about the budget. “No Republican is ever going to do that. So the only way to get rid of inflation is through reconciliation.” Manchin saw it slightly differently, portraying tax increases as budget reduction tools. He believes debt reduction is “the only way” to fight an inflation problem that threatens to wash away Democratic majorities in Congress.

That the federal budget process is broken is the worst kept "secret" in Washington. The White House and Congress know it. The think tanks know it. A 2010 study from the progressive Center for American Progress called the budget process “not a pretty picture.” The conservative Heritage Foundation said in 2005 that the process “stifles debate, prevents cooperation, and frequently breaks down.” Proposals come along every few years to fix the problem, but nothing ever gets done. “The fundamental reason why the federal process is broken is because Congress doesn’t have a budget,” says Kurt Couchman, a senior fellow at Americans for Prosperity. “Congress doesn’t do a budget. Congress does appropriation bills, there are 12 of them.

If you think Washington couldn't get any more dysfunctional, think again. On Monday night, Senate Republicans blocked a Democratic attempt to avoid a government shutdown. This raises the temperature in a Congress that’s already had, shall we say, a pretty high fever since being sworn in on January 3. Depending on who you ask, the Republicans’ latest action is either a brave attempt at stopping Biden’s massive spending package — Mitch McConnell’s stated perspective — or a foolish gamble bringing us one step closer to a debt default, as Democrats claim. In a sense, both sides are right. But Washington also needs to remember that refusing to raise the debt limit is akin to cutting up the credit card after maxing it out. It doesn’t solve the actual problem.

The Senate parliamentarian, Elizabeth MacDonough, delivered another major blow to President Joe Biden's domestic agenda this week, ruling that Democrats may not include a path to citizenship for millions of illegal immigrants in their $3.5 trillion reconciliation package. The parliamentarian's decision was based on the 'Byrd rule', proposed by Sen. Robert Byrd and adopted by the Senate in the 1980s, which limits what can be passed under the reconciliation process. Under the Byrd rule, laws must be 'more than incidental' in their impact on spending or the budget in order to be included in a reconciliation package.