Divided Congress Starts Drawing Budget Battle Lines

BY Quinn Bowman  February 3, 2011 at 4:32 PM EST

President Obama is 10 days away from releasing his budget proposal, but that isn’t stopping Democrats and Republicans on Capitol Hill from staking out their territory in the coming fight over how to fund the government.

Rep. Paul Ryan, R-Wis., unveiled part of his budget plan Thursday, outlining what would amount to $74 billion in cuts from the budget President Obama requested and failed to get last year. Ryan’s cuts would amount to about $36 billion in actual reductions from the current funding levels.

“Washington’s spending spree is over. As House Republicans pledged — and voted to affirm on the House floor last week — the spending limits will restore sanity to a broken budget process and return spending for domestic government agencies to pre-stimulus, pre-bailout levels. Last year, House Democrats failed to pass, or even propose, a budget and the spending binge continued unchecked,” Ryan said in a statement.

As part of their “Pledge to America” issued during the 2010 midterm campaign that brought the GOP back into control of the House, Republican leaders promised $100 billion in cuts compared to President Obama’s never-enacted budget for the current fiscal year.

President Obama’s proposal will “show a very serious path of deficit reduction,” White House Budget Director Jack Lew said in an interview with Reuters. During the State of the Union address, Mr. Obama said he was asking for a freeze on discretionary non-security spending levels for five years.

The reality of big deficits and debt in the wake of the recession, two wars and other spending is driving the issue in Washington. The Congressional Budget Office estimated in January that under current funding levels, this year’s deficit will be $1.5 trillion or 9.8 percent of GDP. CBO estimates that left unchanged, public debt, the cumulative debts owed by the government, will be 77 percent of GDP by 2021.

Congress has until March 4, when current government funding authorization will expire, to figure out a new budget, or to decide to continue federal spending at current levels.

The stakes of the budget fight are high: A failure to reach a compromise between the Republican-controlled House and Democratic majority in the Senate means the federal government could shut down. That outcome doesn’t appear likely, but the Democratic leaders in the Senate want to paint House Republicans as the side willing to risk a shutdown.

At a press conference Thursday, Sen. Chuck Schumer, D-N.Y., castigated the GOP for supposedly threatening a shutdown despite no Republican leader endorsing such action. He was joined by Majority Leader Harry Reid, D-Nev., and Majority Whip Richard Durbin, D-Ill., among others.

“Too many Republicans seem to want to force a government shutdown. That would be the same mistake they made in 1995 – it would be an even bigger mistake now. It’s playing with fire. It’s playing with fire because senior citizens couldn’t get their checks, veterans couldn’t get their benefits, military payments would stop,” Schumer said.

Democrats claimed in a press release that many Republican lawmakers and conservative figures were hinting in recent months that a government shutdown is possible, using quotes from 2009, 2010 and one from 2011 to make that point. Majority Leader Eric Cantor, R-Va., was quoted as saying to Fox News’ Chris Wallace that “the president has a responsibility, as much or more so than Congress to make sure that we are continuing to function in a way that the people want,” when he was asked if he wouldn’t allow a government shutdown. The rest of the quotes did not contain explicit calls for a government shutdown.

While a government shutdown freezes essential services, it can be politically beneficial. When President Clinton and a Republican Congress failed to reach an agreement on funding in November 1995, the federal government was closed off and on until a resolution in 1996. In that year’s presidential election, President Clinton was able to win reelection easily over Senate Majority Leader Bob Dole, and many political observers saw the shutdown as hurting the GOP more than Clinton.