The Bad Budget Wars Get Ready to Resume
Republicans add extraneous provisions to must-pass bills. Obama threatens a veto. Rinse and repeat.
By Alan S. Blinder
Feb. 19, 2015 7:20 p.m. ET
In the classic movie “All About Eve,” the iconic Bette Davis character warned everyone to “fasten your seat belts. It’s going to be a bumpy night.” In the strange world of federal budgeting, 2015 is shaping up to be a bumpy year. After two years of relative peace, Washington’s budget battles are set to resume.
In fact, they’ve already started. In December, as the price of getting the must-pass omnibus spending bill through Congress, Republicans forced President Obama to accept two nonbudgetary provisions that were anathema to him: repeal of some Dodd-Frank limits on derivative trading by banks, and a serious weakening of limits on campaign donations. Both issues were highly partisan; both were Republican victories.
There is a pattern here, one we’ve also seen outside the budget realm. Congressional Republicans add extraneous provisions the president hates to a bill that must pass, and then dare the president to veto the entire package.
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So far, Mr. Obama has wielded his veto pen only twice, the lowest number since James Garfield, who cast no vetoes in his six-and-a-half month presidency. But this Congress will likely present Mr. Obama with several opportunities to increase his veto count.
The resolution funding the Department of Homeland Security expires at the end of this month.
Both parties want DHS to remain fully operational, but the bills passed so far include provisions that would roll back the president’s executive actions on immigration. Mr. Obama has threatened a veto. If neither side blinks, members of the Coast Guard, the TSA and the border patrol might soon see their paychecks suspended, though they would be required to continue working.
Next up, at the end of March, is “the doc fix.” In the 1990s Congress created a formula for limiting Medicare payments to physicians. No one has supported that formula for years, but it remains on the books and grows increasingly punitive toward doctors. So each year Congress passes a one-year stay of execution known as the doc fix.
Ending that now would reduce physician payments enormously, which neither party wants. A bill to extend it another year must pass by the end of March. One can only guess what extraneous provisions might get attached. Maybe a ban on teaching Darwin in public schools?
The granddaddy of all budget deadlines is also in March, when the February 2014 agreement to suspend the national debt ceiling for 13 months expires. If nothing is done between now and March 15—and I guarantee you nothing will be done—the U.S. government will begin breaching the national debt ceiling on March 16.
The Treasury secretary can use a number of gimmicks to postpone the day of reckoning, and experts think such gimmicks can carry us through September or October. Then we’ll witness a serious confrontation of the sort we’ve seen before—a game of fiscal chicken between Congress and the White House.
Other budget battles loom. In May the highway bill expires, and the highway trust fund is projected to run out of cash. The good news is that politicians are already talking about ways to stave off disaster. The bad news is that they will most likely keep on talking until the last minute—or later. Then who knows what gets added to the must-pass highway bill?
Oct. 1, the first day of the new fiscal year, is another important date. The fiscal year 2016 budget is supposed to have been enacted by then, but Congress has not met a fiscal-year budget deadline since the 1990s. Instead, there will be posturing, brinkmanship and acrimony.
Oh, and remember the sequester, the budgetary version of mutually-assured destruction? While both sides want to amend it, even deeper sequester cuts will kick in on Oct. 1 unless an agreement is reached. The Children’s Health Insurance Program must also be reauthorized and funded by that day, or else millions of kids will lose their coverage.
Finally, let’s not forget the so-called tax extenders, the grab bag of special tax provisions popular with both parties. Technically, the deadline for renewing them for 2015 taxes passed on Dec. 31, 2014. But everyone, including the IRS, is assuming they will be extended retroactively. For that to happen, Congress must act before the end of 2015—which is the deadline legislators (barely) met last year. Expect a repeat performance around New Year’s Eve.
After the November election, House Speaker John Boehner and Senate Majority Leader Mitch McConnell promised there would be no defaults on the national debt and no government shutdowns.
But Mr. Boehner has recently backed off the latter. The greater danger, however, might be in the host of bad amendments tacked on to last-minute, must-pass budget bills. To stop such chicanery, the president may need to wield his veto pen as never before. Will he? Fasten your seat belts.
Mr. Blinder, a professor of economics and public affairs at Princeton University and former vice chairman of the Federal Reserve, is the author of “After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead” (Penguin, 2013).
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