Danger lies ahead for Congress, budget

While most of us have been consumed with the three-ring circus that has been the presidential election campaign, the regular business of government has been slowly grinding on.

Unfortunately, several budgetary items facing Congress this fall threaten another government shutdown, with all the political theater and economic uncertainty that accompany such events. And, crucially, all the budgetary items on the agenda hold the potential for tearing the congressional GOP apart while angering both the Republican base and moderate voters.

First up will be appropriations. By law, Congress is supposed to pass all 12 appropriations bills to fund the federal government by Oct. 1, when the new fiscal year begins. As has been the case since 1994, it is unlikely to do so.

So far, the House has passed just six, although the remaining six have made it through committee and are ready for action on the floor.

But the bigger problem, as usual, will be in the Senate, where Democrats are threatening to filibuster, effectively shutting down the government, unless the Republicans agree to lift the sequester caps on domestic spending.

In fact, the Democrats already have prevented the Senate from taking up the defense appropriations bill. That bill would increase defense spending, under the guise of funding for overseas contingency operations, by $39 billion above the level called for by sequestration.

The Democratic leadership is demanding that the defense increase be matched at least dollar for dollar by increases in domestic spending. But other Democrats are reportedly seeking even bigger spending increases, as well as tax hikes.

At the same time, some Republicans are insisting on the inclusion of language that would provoke a presidential veto, such as Ted Cruz’s vow to force the defunding of Planned Parenthood. Democrats vow to filibuster if Cruz is successful in getting a defunding amendment included.

Assuming Congress eventually cobbles together some form of continuing resolution or omnibus spending bill, there will almost certainly be another fight over the debt ceiling.

The latest estimates suggest that the Treasury Department will exhaust the extraordinary measures it has employed to avoid exceeding the debt limit by sometime in late November or early December. President Obama and Senate Democrats are already insisting on a clean bill to raise the debt ceiling without any conditions. Republican deficit hawks will almost certainly demand some reforms in exchange for their support. (Senator Rand Paul has already said that he will vote against a debt-ceiling increase.) Others will see the debt-ceiling bill as a vehicle for their pet cause.

Next, Congress will have to decide whether to reauthorize the so-called tax extenders, a hodgepodge of some 52 special-interest tax provisions ranging from lower taxes on Puerto Rican rum to inflation indexing for teacher expenses.

Walking that tightrope will be a difficult test for the Republican leadership, one that, so far, they have shown little aptitude for. Time is running short. They had better figure something out soon.

Michael Tanner is a senior fellow at the Cato Institute and the author of “Going for Broke:

Deficits, Debt, and the Entitlement Crisis.” Send comments to [email protected].