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New Congress and the Spending Thicket

Author: James M. Lindsay, Senior Vice President, Director of Studies, and Maurice R. Greenberg Chair
January 5, 2011

New Congress and the Spending Thicket - new-congress-and-the-spending-thicket


The 112th Congress, convening today, promises to be one of the most politically charged sessions in recent memory--and one in which government spending will dominate the agenda.

Barring a sudden crisis, foreign policy will be an afterthought amid an intensifying debate over the debt and the deficit. Both parties have taken one potentially explosive national security issue--cuts in defense spending--off the table. Obama is unlikely to demand a vote on any controversial treaties after his bruising fight to secure passage of New START.

The White House has signaled that any Afghan drawdown that starts this summer will be small and slow, which will give Republicans little to complain about. The White House and Republicans might actually cooperate to pass several modest trade agreements that have been languishing.

Yet the tone has already been set for political battles on the domestic agenda. Senate Minority Leader Mitch McConnell (R-KY) vowed just before Christmas that if the Democrats "think it's bad now, wait 'till next year." But the Senate's political dynamics are not changing much.

The big change instead lies on the other side of Capitol Hill, which is back in Republican hands after four years of Democratic control. New House Speaker John Boehner has his hands full. He will be heading a Republican caucus that has eighty-seven new members, many of them proud Tea Partiers bent on remaking Washington.

Therein lies Boehner's challenge. Washington is not easily remade. Republicans discovered that after their epic victory in the 1994 elections. Boehner hopes to avoid former Speaker Newt Gingrich's mistakes and fate. That requires balancing the competing demands of a caucus that leans hard right, a White House poised to paint Republicans as extremists, and a public that wants Washington to fix its problems and protect its favorite programs.

The substantive showdown between the House and President Barack Obama will come over spending. Sometime this spring, Congress will have to vote on whether to increase the ceiling on the national debt or risk pushing the federal government into default. Republicans will demand deep cuts in domestic discretionary spending as their price for voting for more debt.

Presidents typically win budget showdowns, and the feared crisis is averted. But the risk of political miscalculation during the 112th is significant. December's tax-cut fight might lead Republicans to think that Obama will blink if pushed hard enough; the White House might believe that it cannot afford to repeat its tax-cut surrender. Complicating matters is that the House Republicans' commitment to slicing $100 billion in domestic discretionary spending could prove popular in the abstract and lethal in its particulars.

Constituents might recoil when they learn that slashing foreign aid and trimming the House's own budget will not by themselves generate anywhere near $100 billion in savings. Instead, cuts averaging 20 percent will need to be made to thousands of programs that benefit millions of Americans. That could lead some Republicans to waver in their commitment to fiscal discipline, or at least convince the White House that they will waver.

The partisan jockeying over spending will heighten fears at home and abroad over the federal government's ability to manage its affairs as well as potentially damage the weak economic recovery. No one wants to contemplate what will happen if the debt ceiling isn't raised and the federal government defaults on its obligations.

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