The next manufactured, self-imposed fiscal crisis

Updated
 

The debt-ceiling crisis is, at least for a while, resolved. So, will it be smooth sailing for a while in Washington? Maybe policymakers’ attention can turn to challenges like immigration and gun violence?

I’m afraid not. The debt limit has been suspended through May, but if Congress doesn’t deal with automatic sequestration cuts before March 1 – just 36 days away – the result is a scenario that neither side wants to see: painfully deep cuts that would undermine both the economy and the military. As Suzy Khimm reported, avoiding the sequester won’t be easy.

As such, the House and Senate would almost certainly have to go to conference to come up with a compromise between each chamber’s budget resolution – essentially kicking off another round of the negotiations that President Obama and House Speaker John Boehner (R-Ohio) had in the lead up to the fiscal cliff. That’s likely to be a protracted process – one that will probably take weeks after the March 1 sequester deadline to finish.

So as it stands, Congress will still have to put together a separate plan if it wants to prevent the sequester cuts from going into effect on March 1.

Even if both sides were inclined to reach a compromise – they’re not, but just for the sake of conversation – this would be messy. On the one hand, Democrats and Republicans will be working on some kind of agreement on a budget plan. On the other hand, at the exact same time, they’ll also be trying to find about $1.2 trillion in separate savings to turn off the sequester.

But this picture gets considerably uglier once we recognize the fierce Republican opposition to anything resembling a compromise.

In theory, it’s not too hard to imagine a bipartisan deal: half the money could be found through new revenue via tax reform, half could come by way of spending cuts. The problem, of course, is that GOP leaders continue to insist that any agreement be 100% cuts, 0% revenue.

“There’s not a single Republican vote” for more revenue, said Senate Minority Leader Mitch McConnell.

No, of course not. That would be sensible.

In the House, the picture is similar.

“They already got their revenues,” [House Budget Committee Chairman Paul Ryan] said. “So what, we’ll roll over and they get more revenues? That’s not how it works. In the spirit of bipartisan compromise, they’ve gotten revenue increases already. We’ve yet to get anything as a result of it.”

That Paul Ryan just doesn’t have a very good memory. In 2011, there was a big debt-ceiling agreement in which President Obama accepted over $1 trillion in spending cuts.

“We’ve yet to get anything”? House Speaker John Boehner boasted in 2011, “I got 98% of what I wanted.”

If the 2011 agreement included cuts, and the 2012 deal featured revenue, is it really so outrageous to think a 2013 compromise should be balanced and include a combination of both?

Explore:

Sequester

The next manufactured, self-imposed fiscal crisis

Updated