StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between


Posted by Stan Collender

By changing it's rules yesterday to prevent filibusters on executive branch and judicial nominees (other than the Supreme Court) -- the so-called nuclear option -- the Senate further complicated a federal budget debate that was already overly complicated and had little chance of success.

Although it's still less likely than likely, the prospects for a government shutdown in January increased significantly. Based on yesterday's action, I have increased the possibility that funding for the federal government will not be adopted by the time the current continuing resolution expires to 40 percent.

And the likelihood for sequestration to occur as scheduled in mid-January also jumped significantly.

Here's why.

1. In general terms, the federal budget debate in recent years has always been more emotional than rational and far more political than substantive. The emotions and politics were significantly ramped up yesterday.

Posted by Stan Collender

House and Senate budget conferees will formally get together again this week. This will be their first meeting since the ceremonial opening session on October 30 featured nothing more than politically self-serving opening statements,

Expect nothing to happen at this meeting...unless you believe that a further hardening of the positions each side stated at the last meeting represents something happening. it's simply too early in the process for anyone to offer a concession of any kind. The meeting will also be way too public for anything like a serious discussion, let alone an actual negotiation, to take place.

As I've said before, a budget conference committee of 29 representatives and senators is so unlikely to be able to agree on anything that, unless they want to go hungry, they had better delegate to a single staffer the authority to decide what to order for lunch. That's especially true if the lunch discussion takes place in an open hearing where CSPAN and others are broadcasting the deliberations.

Expecting little to happen should be the mantra for everyone following the budget events scheduled for the next few months.

Posted by Stan Collender

It wasn't too long yesterday after House Speaker John Boehner (R-OH) announced his support for the president's position on Syria that the blogosphere erupted with speculation that the White House had cut a deal. Boehner, it was said, had quickly signed on to U.S. military action against Syria in exchange for the White House moving closer to the GOP position on the upcoming battles on the continuing resolution, the debt ceiling and sequestration, that is, on #cliffgate.

That's nonsense.

The two issues are so separate, the White House and congressional Republicans are so far apart on everything having to do with the budget, Boehner's and Obama's ability to deliver their respective party's votes on spending and revenues so doubtful and Boehner's and the president's history of negotiating so poor that it's virtually impossible to imagine how the administration and the speaker could possibly have come to any agreement on Syria and #cliffgate so quickly.

Posted by Stan Collender

As I posted on March 1, the sequester -- the across-the-board spending cuts ordered by the Budget Control Act-- would only become real for most voters when the predictions of the impact of the reductions actually started to have a effect on their lives.

Although some people felt it almost immediately, any budget analyst worth his or her salt knew that the real pain was always going to come when federal programs that were labor intensive started to implement furloughs, layoffs and hiring freezes and the services they provided had to be curtailed. That was always going to take a month or more because of the process that needs to be followed to notify employees.

But the fact that labor-intensive programs didn't reduce services immediately when the sequester began on March 1 never meant that it wasn't coming. It always was and the protests that the White House was playing fiscal chicken little were simply wrong.

Posted by Stan Collender

As I expected and warned everyone when legislation was enacted requiring it in early August, the report released by the Office of Management and Budget last Friday with the details of the spending cuts that will occur if the sequester actually happens on January 2 was a nonevent that provided little, if any, actual new information or guidance. It was barely a one-day story that may provide all sides in the debate, that is, those who want the across-the-board spending cuts to occur and those who think they're a tool of the devil, with some fodder for arguing their position but no real additional ammunition to make their case.

If what I'm saying isn't plain enough...The OMB report that some thought could be a game-changer, actually changed nothing.

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