Late Friday night, just minutes from an impending government shutdown, congressional negotiators and President Barack Obama reached a deal to fund the government for the rest of the fiscal year, cutting $38.5 billion under current funding levels. House Speaker John Boehner (R-OH) and other Republicans hailed the deal as an important step to reining in the deficit, while Obama lauded it as a bipartisan achievement, comparing it to the compromise he helped broker late last year on extending the Bush tax cuts for two years. “A few months ago, I was able to sign a tax cut for American families because both parties worked through their differences and found common ground,” he said in a statement. “Now the same cooperation will make possible the biggest annual spending cut in history, and it’s my sincere hope that we can continue to come together as we face the many difficult challenges that lie ahead, from creating jobs and growing our economy to educating our children and reducing our deficit.” To keep the government running, lawmakers passed a short-term spending measure and are preparing to vote on a final agreement later this week.
CUTS DWARFED BY BUSH TAX CUTS: While the details of the deal are still emerging — the agreement would cut $13 billion from programs at the Departments of Labor, Education and Health and Human Services, $1 billion more in an across-the-board cut from domestic agencies and $8 billion in cuts to the State Department and foreign aid — the New York Times reports that negotiations came down to the wire, as Republicans sought to move the goal posts on negotiation and press for greater cuts. On Thursday night, for instance, Obama believed that he “had made a breakthrough in the negotiations, when he told Mr. Boehner that he would sign on to spending cuts of roughly $38 billion — $5 billion more than he had offered two days earlier.” But the following morning, Boehner reneged, saying that he would demand “north of the amount we’d offered the night before.” The demand led to a heated exchange between Obama and Boehner in which the President said, “I’m the president of the United States, you’re the speaker of the House. We’re the two most responsible leaders right now. We had a conversation last night, and what I’m hearing now doesn’t reflect that.” The final agreement of $38.5 billion in spending cuts, however, ia still dwarfed by the lost revenue from extending the Bush tax cuts, which the Republicans loudly championed. That policy deprives the government of roughly $150 billion in revenue over a similar period of time. As Alex Seitz-Wald points out, “So while they very nearly shut down the government to extract painful spending cuts, Republicans had already wiped out those spending cuts many times over with the revenue lost from extending the Bush tax cuts.”
RIDERS REMAIN: Despite securing a significant concession on spending, House Republicans were forced to drop over 40 riders or policy demands — including Rep. Mike Pence’s (R-IN) amendment to defund Planned Parenthood and another provision that would have blocked standards to protect public health from carbon dioxide, mercury, and other toxic pollutants — from the short-term budget bill. Instead, they secured a guarantee that the issue would receive an up or down vote on the Senate floor and kept provision that would prohibit the District of Columbia from using its own funds to pay for abortion services. The rider would not save any additional federal dollars, however, since it only prohibits the District from spending its own locally-raised tax dollars on the procedure, reviving a 13-year ban President Obama overturned in 2009. Washington D.C.’s Congressional delegate, Eleanor Holmes Norton (D), condemned the provision and warned that Republicans may still advance an unresolved measure that would ban on the city from running needle exchange programs and would actually increase spending (a study from Yale University found that needle exchange can reduce government spending by millions of dollars by preventing disease transmission.) “The District is still on the auction block during the final negotiations over the budget bill because Republicans want a ban on the use of D.C. local funds for needle-exchange programs in the package, which would guarantee the spread of HIV/AIDS among our citizens,” Norton said. Another rider secured by Republicans would also reinstate a school voucher program in D.C. and make small changes in the Affordable Care Act.
THE NEXT FIGHT: Over the weekend, Republicans reiterated that the short-term funding negotiations were only a dress rehearsal for the looming fight over an increase in the debt ceiling. Boehner insisted on Saturday that there is “not a chance” Republicans will deliver a “clean bill” to raise the debt ceiling and House Majority Leader Eric Cantor (R-VA) predicted that “the White House and the president will actually capitulate” and agree to “spending caps, entitlement reforms, budget process reforms ” in the debt limit increase. It is widely understood, however, that failing to raise the debt ceiling on schedule could have immediate and dire consequences for government services and the global economy. As the Center for American Progress’ David Min has pointed out, it would force an immediate cut of approximately 40 percent to all activities of the federal government — a severe blow to our already struggling economy. It could also erode confidence in U.S. Treasury bonds, causing interest rates to spike and the possible destabilization of global financial markets. If investor confidence is eroded and Treasury rates go up, the higher costs of debt maintenance would counteract (and potentially could even be larger than) any spending cuts at issue. Sen. Lindsey Graham (R-SC) has acknowledged as much, as has Boehner, Rep. Paul Ryan (R-WI), and conservative columnist George Will . This has not prevented many GOP lawmakers from threatening to vote down an increase in the debt limit if their partisan demands are not met. Senate Minority Leader Mitch McConnell (R-KY) has said there can be no increase without entitlement cuts and Sen. Rand Paul (R-KY) demanded an implicit 44 percent cut in all government programs in exchange for an increase.
Be a Seed for Change 
You must be logged in to post a comment.