StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



Only Way New Budget Talks Will Succeed Is By Redefining Success

21 Oct 2013
Posted by Stan Collender

I have far less hope for the post-shutdown talks that are about to get underway than many of the others who follow, analyze, comment and report on federal budget doings.

Actually, I am astounded at how quickly so many people who should know better seem to have forgotten the insanity of the past few years that led to the total craziness of the past few weeks and have decided there are no lessons to be learned from what happened.

Here's what I've learned.

It's nice to see that some members of Congress, especially some Republicans, have already rejected another showdown when the current continuing resolution expire and debt ceiling expire. It's important to note, however, that the representatives and senators who have said this are not the ones who will determine whether it happens again. Until tea partiers in both houses say a shutdown and debt ceiling fight isn't going to happen, the threat has to be considered a real possibility.

Why does anyone think the tea partiers in Congress are going to throw in the towel on the budget just because they weren't successful this time? Nothing that has happened over the past few years indicates that legislative or election losses convince them to moderate their demands or tactics. In fact, just the opposite has occurred with tea partiers doubling down rather than moderating their preferences, demands and tactics after each failure.

Does anyone really think that the tea party wing of the GOP is less frustrated legislatively now than it was before the shutdown?

I know that the tea partiers expressed admiration for House Speaker John Boehner (R-OH) and are saying that he is in a better position with them now than he was before the shutdown. First, that's not saying much. Second, getting very grudging respect from that faction of his own party does not give Boehner any additional room to maneuver the next time around on the budget. He still will have to placate them until the very last minute or be subject to their ridicule, wrath and disrespect throughout the process.

A grand bargain by the conference committee's middle-of-December deadline is not just unlikely, it's total fantasy. The politics of the budget were not changed by the shutdown and revenue increases sufficient to convince Democrats to agree to changes in Medicare and Social Security and changes in Medicare and Social Security sufficient to convince Republicans to increase revenues are not going to be possible before the 2014 (and probably not before the 2016) election.

The White House and congressional Democrats have little-to-no reason to be any more cooperative on the budget in December, January and February than they were in September and October. In fact, they will have less reason to compromise. Given the political albatross this last shutdown has become to the GOP and the overwhelming likelihood that Republicans will be blamed if it happens yet again, why will Democrats do anything to make it easier for them this time around?

And why does anyone think that the 2014 sequester that will occur on mid-January unless Congress and the White House agree on a deal to stop it will be enough to get everyone to compromise? Everyone also hated it the first time around but it was the best alternative compared to all of the others. Not only will that still be the case in January 2014, it will be even truer this winter with the primaries and general election being only months rather than years away.

That's not to say that a budget deal can't or won't happen in December and January. But it does say that, if there is a deal, it will be much smaller and far more symbolic than significant. It will be the kind of deal where everyone declares victory and goes home.

Budget

The Dems need to do something other than Grand Bargain: Entitlement cuts for increased taxes. We are still in a jobs crisis and can't expect the budget to balance until we return to full employment. Dems need to pivot away from deficit reduction and explore a budget that includes neither increased taxes nor entitlement cuts.


Grand bargain...not going to

Grand bargain...not going to happen. Really the best that seems possible is limping through a series of CRs. It is a picture of just how broken our political system is that this might look like "success."




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