After August break, a September fire drill? Fiscal crises await Congress.

Congress has nine working days when it returns in September to avert a government shutdown and, soon after, another debt limit crisis. So far, the dealmakers have yet to engage.

By , Staff writer

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    House Speaker John Boehner (R) of Ohio takes reporters' questions on NSA leaker Edward Snowden, the economy, and the unfinished work of the House in passing a spending bill, during a news conference on Capitol Hill on Thursday. Congress is starting a five-week recess.
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On the two most pressing issues confronting Congress after the August recess – preventing a government shutdown and raising the federal debt ceiling –congressional Democrats and President Obama have their game plan down pat.

Congressional Republicans, on the other hand, appear to be drawing up their plays in the sand, with rump groups in both the House and the Senate pursuing strategies at odds with party leadership. 

With Congress out for a five-week August break, this disjointed state of affairs on Capitol Hill could mean Washington is headed for another intense fiscal battle in the fall, when it has only nine working days to come to terms before the fiscal year ends and the lights go out on Oct. 1, and before the national debt ceiling is breached, sometime after Labor Day.

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When Mr. Obama came to Capitol Hill on Wednesday, he spoke with congressional Democrats about the National Security Agency's data collection programs, the implementation of his signature health-care law, the immigration reform fight, and an unusually public battle over potential replacements for the chairman of the Federal Reserve. What he didn’t spend much time on, Democrats say, was how to proceed on the debt ceiling and funding the government.  

“The caucus has followed the president very closely. We know what's in his budget. We know what he would do if Republicans stepped forward” on a compromise proposal, Senate majority leader Harry Reid (D) of Nevada told reporters. "We don't need a long discussion.”

The White House game plan, publicly endorsed by Democrats, is to push for an increase in the nation’s debt limit without attached policy changes. Moreover, the president says he will not sign spending bills that don't treat defense and nondefense spending equally.

“He made it very clear that he was not going to negotiate over the debt ceiling – we have got to stop lurching from crisis to crisis,” said Sen. Patty Murray (D) of Washington, the fourth-ranking Democrat in the upper chamber.

That's a vow long-made by the president but, since the summer of 2011, one that Republicans have forced him to abdicate, because defaulting on the US government debt is almost universally believed to be a precursor to a worldwide financial shock that could sink the US economy. That's an outcome Obama has promised to prevent.

To extend government funding, Democrats likewise will try to replace cuts from the “sequester,” the automatic, across-the-board budget reductions that went into effect earlier this year after Congress failed to find a compromise to turn them off or adjust them. They’ll attempt to do so with new revenues or long-term spending reductions in entitlement programs, said Gene Sperling, director of the White House’s National Economic Council, at a breakfast this week sponsored by The Christian Science Monitor.

While Democrats insist that Obama remains open to a sweeping deal with Republicans, they don’t believe Republicans are ready for such a pact.

“Any time is a good time for a big deal, a small deal ... and that’s going to depend on a large part of Republican willingness to compromise,” said Dan Pfeiffer, a White House senior adviser, at the Monitor breakfast. “We have to see what the system can bear.”

Republicans say they, too, are open to a sweeping deal with the White House, but are deeply divided on the terms of the negotiation. 

House Speaker John Boehner (R) of Ohio set a new standard for raising the debt limit when, in 2011, he demanded spending cuts equivalent to the amount of the debt-ceiling increase. Republicans in both houses backed this demand and prevailed.

But this year, GOP lawmakers have drawn competing lines in the sand. A group of Senate conservatives, backed by some GOP House members, are refusing to approve funding for the new fiscal year unless Obamacare is defunded, to the last dime. Given the GOP's inability to pass spending bills at its preferred, more austere level of government spending in the near term, it's unclear what kind of long-term spending concessions Republicans could actually wring out of the White House.

Meanwhile, attempts are ongoing to find points of compromise between the White House and a select cadre of Senate Republicans, who have met with the president and Chief of Staff Dennis McDonough in recent days to discuss fiscal issues.

Sen. Bob Corker (R) of Tennessee, one of this group, says Senate Republicans and the White House could come to a smaller deal to continue government operations by exchanging the sequester cuts for reductions to mandatory spending programs that stand to generate much more of America’s long-term debt or, perhaps, by reaching the sweeping "grand bargain" on fiscal issues that has eluded lawmakers and Obama since 2011.

But Senator Corker and perhaps a half-dozen other senators are matched by a garrulous group of conservative senators with unyielding demands.

This group, led by Sens. Rand Paul of Kentucky, Mike Lee of Utah, and Ted Cruz of Texas, objects to the House and Senate attempting to iron out the differences between the budgets of the two chambers, fearing that party leaders will agree to raise the debt ceiling as part of a fiscal deal but won't extract sufficient concessions from the White House.

The same group is demanding that Senate Republicans vote against any government spending bill that includes funding for Obamacare, saying that shutting down the government for some time would be a small price to pay for killing the president’s law.

The trio argues that though their party was politically punished for precipitating two shutdowns in the mid-1990s, the outcome was worth it – and that Republicans who do vote for any legislation that funds Obamacare are guilty of endorsing it.

“There are a great many Republicans who are haunted by the ghost of shutdowns past,” Senator Cruz said at the Heritage Foundation on Tuesday. “It is received wisdom in Washington that the 1995 shutdown was terrible for Republicans.... I don’t believe the evidence supports that conclusion.”

“There was some political pain. President Clinton took a two-by-four to the Republicans and scored some political points,” Cruz continued, “but as the result of their standing up for principle, we saw year after year of balanced budgets coming out of Congress.”

House and Senate Republican leaders have avoided weighing in on the Senate conservatives' plan. But several of Cruz’s colleagues say such a plan is either ineffective or would put Republicans on the wrong side of the politics of a government shutdown – or both.

“The only effective way to truly stop Obamacare – and I think we ought to stop it – would be to totally reverse it. We don't have the votes to do that,” said Sen. Tom Coburn (R) of Oklahoma on the Senate floor Tuesday.

Senator Coburn added that while standing strong on a government shutdown might win them concessions, he feared many Republicans wouldn’t carry through with the threat when the government actually did shut down and public pressure rose to reopen it, earning them the public’s aspersion with none of the benefits.

“And just so my colleagues will remember, it was actually 1996 when we had the government shutdowns, and everybody was all for it – till they weren't,” said Coburn, who voted against reopening the government as a House member at the time. “I also know human nature. And the very people that say they'll do things today, when it really gets tough don't do it.”

In the House, Republicans head into fiscal negotiations on similarly rocky footing, having difficulty proving they can overcome divisions in their own ranks to pass their preferred legislative agenda of deep spending cuts.

Republican leaders pulled a bill funding housing, urban development, and transportation priorities from consideration on Wednesday because, House Republican leadership contends, they wouldn’t be able to handle all of the amendments to the bill before the chamber adjourned for the August break.

But Rep. Hal Rogers (R) of Kentucky, chairman of the Appropriations Committee, blasted the decision, arguing that House Republican leaders did so for lack of GOP support and that House Republicans proved they can’t follow through on the deep cuts projected in their budget earlier this year.

The House has approved four appropriations bills – each at spending levels above those specified by the Budget Control Act (the legislation capping federal discretionary spending for the decade after its passage as part of the 2011 debt ceiling deal, or with only minor reductions below that level). Thus, the transportation bill was the chamber’s first test to pass legislation at the “austere” level of the House Republican budget, explained Representative Rogers in a statement.

By pulling the bill, knowing it has “bleak” prospects of passage after the August break, House leaders showed the House to be incapable of backing up tough budget talk, Rogers said. He also said that the sequestration cuts, which many in the party hailed as a victory for fiscal conservatism, need to be reversed or replaced.

“With this action, the House has declined to proceed on the implementation of the very budget it adopted just three months ago. Thus, I believe that the House has made its choice: Sequestration – and its unrealistic and ill-conceived discretionary cuts – must be brought to an end,” said Rogers.

“The House, Senate and White House must come together as soon as possible on a comprehensive compromise that repeals sequestration, takes the nation off this lurching path from fiscal crisis to fiscal crisis, reduces our deficits and debt, and provides a realistic topline discretionary spending level to fund the government in a responsible – and attainable – way,” Rogers continued.

Even with so much uncertainty, Speaker Boehner continues to say that Republicans and Democrats will find a way to progress.

“We're going to have ample time to deal with the fiscal issues that are staring us right in the face,” Boehner said Wednesday. “And I'm confident that when we get into the fall, we'll find – it may be a messy process, but I suspect we'll find – a way to get there.” 

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