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#Cliffgate: Are You Really Betting On The Tea Party To Stop A Shutdown?

22 Sep 2013
Posted by Stan Collender

A government shutdown and #cliffgate may still not occur.

But those who are discounting the chances of it happening have far more confidence in the willingness of the tea party wing of the House GOP to act rationally at the last minute as its dreams of being seen as uncompromising and defiant are close to being realized than I do.

Here's why will it be up to the tea party wing and not, as many others are saying, House Speaker John Boehner (R-OH) to decide whether a shutdown occurs.

Now that the House has passed a continuing resolution that the Senate won't accept because it defunds Obamacare, the budget process choreography for the coming week will be as follows:

  1. The Senate will begin to debate the House-passed CR on Monday or Tuesday.
  2. The Senate is likely to strip out the defunding provision.
  3. The Senate may increase the spending level from what the House included in its version of the CR.
  4. Senate Republicans may filibuster the CR and, therefore, bear the responsibility for the bill not being enacted by the start of the fiscal year and, therefore, for the shutdown.
  5. But, in one of the great legislative ironies in American history, Senate parliamentary procedures will force the GOP to filibuster the House-passed CR that defunds Obamacare. In other words, Senate Republicans technically will be preventing what they say they actually want to happen from being adopted.
  6. If the filibuster doesn't happen, the Senate is not likely to send whatever CR it passes back to the House until next Thursday, September 26, at the earliest.
  7. If there is a filibuster and cloture is invoked, the Senate-passed bill may not get back to the House until the 28th or 29th of September, that is, just two days before a shutdown will begin.

So, with no more than four days to go, House Republicans will be faced with the choice of forcing a showdown over Obamacare by shutting down the government or backing down after getting the equivalent of a legislative middle finger from Majority Leader Harry Reid (D-NV) and the other Senate Democrats.

They would likely pick the shutdown if the decision had to be made today, that is, a week before the fiscal year begins.

But t's hard to imagine that there will be an enhanced sense of compromise a week from now after all sides undoubtedly have said things that are less- than-pleasant about each other and emotions are particularly high.

This especially will be the case if the Senate increases spending over the House-passed levels AND strips out the defunding provision. If that happens the CR sent to the House by the Senate will be anathema to the tea party and it will have virtually no choice but to refuse to accept the legislation even if it means a shutdown on October 1 becomes all but certain.

A shutdown under these circumstances would likely be blamed on Republicans. But that might not be a big political problem for the tea partiers in the House because their base -- those who vote in Republican primaries -- may well prefer that to anything that looks and sounds like collaborating with the enemy. 

This is a different scenario that the one that puts Boehner in charge as the clock begins to strike midnight on fiscal 2013 next Monday. Some reports have said that Boehner will do what he has done before and work with House Democrats and a handful of GOP moderates in his caucus to pass something that prevents the shutdown from happening.

The problem with that analysis is that it misses the key point: Boehner has only been able to work with House Democrats on some budget bills in the past because his caucus -- mainly his tea partiers -- gave him permission to do that.

Boehner held firm until the last possible minute to demonstrate to his TPers that he was willing to go to the mat for them. That's when they in effect told him they would not oppose his efforts to get votes from across the aisle.

Three things make that less likely this time.

First, Boehner's tea partiers seem to be far more militant and less likely to grant him that permission to work with Democrats this time around. Remember, it was the tea party wing that forced Boehner to go with a CR that defunded Obamacare in the first place.

Second, it's not at all clear that House Democrats will be as willing to provide the votes Boehner needs this time as they have been in the past. At the very least they are likely to demand something more from Boehner for their votes, and anything they want -- like the Senate-passed higher fiscal 2014 spending level -- will probably make it impossible for Boehner to work with them.

Third, as noted above, it's not clear that the tea partiers fear the political ramifications of a shutdown. Indeed, their base and, therefore, they may welcome it.

All of this points to a very basic fact about what's ahead this week: Boehner may be the speaker, but it's the tea party members of the GOP caucus that will be in charge and deternine whether a shutdown occurs.

 

Thoughts

I still stand by my prediction that an 11th hour compromise will be reached. Now, if the Senate Dems were to change the funding levels in the CR, I could see the House GOP refusing to accept it and a shutdown occuring. However, I don't think the Senate Dems will do that (at least I hope not) - I expect them to simply strip out the defunding of "Obamacare", pass it, and send it back to the House, which will pass it at the last minute after the usual grumbling. If the House refused they would rightly be blamed for shutting down the government not because they sought lower spending but rather because they were trying to do a backdoor repeal of Obamacare through the budget process.

A number of right wing outlets are already making the argument that the real fight should be saved for the debt ceiling. This makes no sense at all to me except for the possibility that they're just readying their members for defeat on the CR and buying themselves another couple of weeks before their next defeat.


PSA: here is the Continuing Resolution as passed:

...and embossed, which is a quaint term for a PDF:

http://www.gpo.gov/fdsys/pkg/BILLS-113hjres59eh/pdf/BILLS-113hjres59eh.pdf

A ripping yarn, for sure. More seriously, the thing seems to be constructed as follows:

  1. Sections 101-110: Standard CR boilerplate, pretty much.
  2. Section 111: SNAP/Farm Bill Fix: because this didn't get done yet, we just continue the 2008 bill until December 15, 2013.
  3. Section 112: "Please don't furlough the people unless you have to". Seems to give agencies some flexibility to nuke other expenses before furloughing people. Somebody with more expertise here could chime in.
  4. Section 113: Seems to allow the State Department to carry on doing certain things without having to heed statutes that would reduce their flexibility
  5. Section 114: Fixes for SSA and expenses due to GWOT (Global War on Terrorism)
  6. Section 115: Fixes something related to section 3003 of Division G of Public Law 113-6 for FY2014. (Sorry; didn't look this up yet.
  7. Section 116: Fixes Food for Peace Act
  8. Section 117: NOAA can launch some necessary satellites.
  9. Section 118: Fixes National Defense Authorization Act for part of FY2014
  10. Section 119: Fixes (and I quote) Section 14704 of title 40. A little help here?
  11. Section 120: DC the place continues to function during the CR
  12. Section 121: DOJ Defender Services gets a billion and change (somebody should check; I think they were running out of cash).
  13. Sections 122-123: Fixes other laws I don't immediately recognize.
  14. Section 124: Fixes Homeland Security Act of 2002
  15. Section 125: Appears to beef up (or maintain current beef) of border security
  16. Section 126-127: Continue to fight wildfires, please.
  17. Section 128: Fixes something else related to the Department of the Interior
  18. Section 129: Fixes something in SSA.
  19. Section 130: Appears to give Mine Safety some more money
  20. Section 131: Appears to fix Low Income Energy Income assistance
  21. Section 132: Fund Refugees?
  22. Section 133: Tells DHHS to spend any excess money on research, flu epidemics, and apparently other good things.
  23. Section 134: In its entirety: "Notwithstanding any other provision of this joint resolution, there is appropriated for payment to Bonnie Englebardt Lautenberg, widow of Frank R. Altenberg, late a Senator from New Jersey, $174,000.
  24. Section 135: Apparently increase operating expenses for the VA
  25. Section 136: Continue one HUD Rental Assistance demonstration project
  26. Section 137: Oh yeah: defund ObamaCare.
  27. Section 138: Something pretty complicated related to the debt limit. Can anybody parse this?

So what will the Senate mess with here? I wish I understood what Section 138 really did.


Section 138

My reading is that it exempts any previously-authorized expenditures from being considered part of the debt ceiling until the end of CY 2014.

Though it would require a report on all new debentures issued.

Curiously--or deliberately--it specifies that such obligations shall be exempt from consideration as part of the debt ceiling but does not specify that such obligations will cause the debt ceiling automatically to be raised to include them.

So there will have to be a separate debt ceiling vote, before 31 Dec 2014, to increase the debt ceiling to include the debentures already allocated but "exempt from" the debt ceiling.

If I bought one of those new issues in the next fifteen months and it matured after 31 Dec 2014, I would be Very Afraid.


Can you explain Boehner's calculus a bit more?

You say that Boehner essentially needs the Tea Partiers' blessing to take any vote, but what exactly do you mean by that? Just that he's risking his Speakership if he allows a vote that they oppose? If that's the only leverage they have, then doesn't it start to matter quite a lot how many of them there are who are willing to instigate a coup? Anybody have a guess for that number? Seems like there's a world of difference between 25, 50, 75.


So I've already lost money

So I've already lost money due to sequestration related furloughs, and already pretty tight; and you say they will shut things down and take away more of my paycheck?

Seriously Tea Party... screw you... I'm relying on my paycheck....


Section 138

My reading of section 138 is that it allows Treasury to issue debt exempt from the limit only as necessary to pay for the current debt. In formal terms Treasury may not issue debt to cover primary deficit, but may use it to cover payments on existing debt.

I suspect that this is intended as a way to force Treasury to not default on the public debt, even when actual expenditures can't be covered. An analogy might be a person promising to pay his mortgage but not his utility bill. Section 138 then ensures that Treasury can borrow as much as needed to cover interest payments and debt roll over, without limit, thus avoiding a default on Treasury bonds (though at the same time not promising to pay for electricity).

If my reading is right, this possibly creates a (limited) loop hole on the debt ceiling for primary payments as well. My usual example is that I don't want to subsidize my gf buying shoes, but I don't mind subsidizing vacation airfare. Of course if I pay her airfare, she uses the savings to buy shoes... since money is fungible, it's impossibly to really say it can only be used for one purpose. If UST is putting tax money into debt payments, then congress subsidizes debt payments, the tax money can go somewhere else. In essence, this loop hole might allow Treasury to fund a primary deficit up to the amount of debt interest and maturing principle.


That was my interpretation...

...but I don't see how it really accomplishes that much. Does Congress really think that the financial system will be impressed by this? To use your first analogy, if I paid the mortgage but not my credit card, my credit rating would be just as much in the toilet in pretty short order as it would be if I were only paying 78% of both.


When you borrow from the bank

When you borrow from the bank and buy on credit from the grocer, it matters to the bank whether you pay the bank or the grocer. It would probably make a profound difference to inventors whether payment of Treasury debt is privileged over other obligations. That is, after all, the logic of a subordinated debt market.

Treasury has said it can't separate out one payment stream from all others. There is a reasonable chance that's untrue, and a further chance that it's true now but fixable. In the case of rolling over maturing debt, I would expect there to be a separate loop in the payment system or some such thing, just for accounting purposes.


More like "blow off paying the grocer"

That is why it is a default. And if you default on the grocer, is the bank going to loan you more money?


agree

I completely agree. It doesn't make much sense to me. It's like they want to look responsible without actually thinking about it. Or something.


One of the unfortunate things about this

Something that's kind of unfortunate is that if we have a shutdown, the Tea Party extremists probably won't pay a price (they might even be rewarded), but Republicans in moderate districts ARE likely to pay a price.

The Republicans who least want a shutdown are the ones who will feel the most pain from voters. Even if they say they opposed the shutdown, their party affiliation might make them guilty by association to many voters.

So this creates the possibility of a smaller (but still dominant) GOP majority after 2014, but one where the Tea Party is even more powerful. After all, some of the moderates will be defeated by a Democrat.


Lay down with dogs, get up

Lay down with dogs, get up with fleas.

(Or as a rabbi of my acquaintance once put it, lay down with apes get up with apes.)




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