December Disaster Looms As Spending, Debt, and Tax Controversies Pile Up

Yes, another legislative train wreck is in the offing for the last month of the year.

It’s not getting much attention in a political commentariat focused on tax cuts and sexual misconduct. But very soon Congress is going to have to deal with the can of worms it kicked down the road in September via an unlikely deal between Donald Trump and congressional Democrats. The short-term spending measure and debt-limit extension passed on September 8 expires on December 8. A consensus has developed to pass a stopgap bill continuing federal spending at current levels until right around the end of the year, or possibly until very early in 2018. But the specter of partisan gridlock and possibly a government shutdown hangs over the desultory negotiations over a spending deal and other issues that each side is insisting on cramming into the bill.

Unlike the health-care and tax legislation that has consumed so much congressional energy in 2017, the spending measure cannot be passed by special budget rules enabling passage by a simple majority in the Senate. So Democratic cooperation is a must — particularly since a number of House conservatives routinely vote against spending bills as a matter of principle. And one of the big questions surrounding a spending deal is whether Democrats exploit that leverage to make some nonnegotiable demands, particularly since the Republicans who control the federal government are almost certainly going to get the lion’s share of the blame if a shutdown occurs.

The most likely deal-breaker demand is relief for Dreamers (young undocumented immigrants brought into the country as children who meet certain conditions indicating good behavior) now under threat of deportation after the president’s delayed suspension of the Obama administration’s DACA (Deferred Action for Childhood Arrivals) program. The administration and its congressional allies would prefer a DACA deal that encompasses restrictions on legal immigration and/or beefed-up border security, including money for the president’s much-ballyhooed wall. But making the issue part of a larger spending-bill bargain could lead to a DACA extension more to Democrats’ liking.

Another potential Democratic demand involves money for the CSR (Cost-Sharing Reduction) payments to insurance companies that Trump ended last month, which has threatened the stability of Obamacare’s individual insurance markets. As with DACA, there have been extensive bipartisan negotiations to address this problem; the Alexander-Murray legislation, restoring CSR payments in exchange for greater state flexibility in implementing Obamacare requirements, has enough support to pass the Senate, and more recently, Republicans have discussed letting that bill see the light of day as a counterweight to the tax bill’s proposed elimination of the Obamacare insurance purchasing mandate. If such maneuvers fail, Democrats could simply refuse to support a spending bill unless CSR payments are included.

If such demands are deemed excessive by the congressional leadership or the White House, Republicans might choose to solidify their intra-party support so that fewer Democratic votes are needed. But conservatives could then issue their own demands, which might include anti-abortion provisions defunding Planned Parenthood, or border-wall money, or major domestic spending cuts.

And hanging over all the negotiations will be the virtual necessity of a deal over the separate defense and non-defense spending caps imposed as part of a fiscal deal back in 2011. Congress has regularly waived the caps via deals that gave Republicans more defense spending and Democrats more domestic spending. Republicans and a significant number of Democrats want to reform or abolish the caps once and for all to let defense spending rise. But Democrats will surely want a corresponding relaxation of non-defense caps, and conservatives will violently resist.

If all that isn’t complicated and contentious enough, the continual slippage of the deadline for a spending deal makes it increasingly probable that the negotiations over it will encompass debt-limit legislation as well. The two issues had supposedly been decoupled thanks to Treasury assurances that it could deal with government borrowing needs for a while after the last extension expired. But as Politico reports, Congress may decide to lump it all together anyway:

[W]e hear that THE DEBT CEILING could be part of the mix in the final month of the year, as well. Treasury says Congress has until January to lift the debt limit, but some say if Congress is going to slap together a big package, the debt limit might as well be included. No one really wants to raise the debt limit in an election year, anyway. But the negotiations have to be going really well for the debt limit to be included.

The possibility of a debt default (about which conservatives are dangerously sanguine) raises the stakes in the year-end negotiations significantly. And beyond all that, if the tax bill is also hanging in the balance in December, it will be impossible to avoid linkages between that fraught issue and all the other items piling up in this sluggish Congress’s in-box.

Get ready for some yelling and screaming and wheeling and dealing, real and feigned. The holidays will not be so happy in Washington.

December Disaster Looms As Stopgap Spending Bill Expires